A. Define transfer pricing and elaborate on FOUR (4) of its purposes.
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Please answer questions A, B and C. thank you
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- Discuss the advantages and disadvantages of a market-based transfer pricing approach.A transfer pricing arrangement that uses the price that would be charged to an external customer is a______. A. market-based approach B. negotiated approach C. cost approach D. decentralized approachDiscuss the advantages and disadvantages of a negotiated transfer pricing approach.
- Define transfer pricing and elaborate on FOUR (4) of its purposes. B. In deciding a transfer pricing method, advise management on:i. negotiated transfer pricingii. market-based transfer pricing C. Highlight ONE (1) advantage1 (b) (i) Explain the criteria used for judging a transfer pricing system (ii) Explain the term “ negotiated versus imposed transfer prices “ (iii) Explain two methods of transfer pricing.The company uses the opportunity cost approach to transfer pricing. What is the minimum transfer price in Case 1?
- C. Highlight ONE (1) advantage and ONE (1) disadvantage of the market-based transfer pricing method.What is Transfer Pricing? What are the approaches in determining transfer prices? In your own idea, identify some best practices in transfer pricing.Select Among the choices, this transfer prices basis is considered as the most inferior one: a. variable cost transfer pice b. full cost transfer price c. negotiatied transfer price d. external market transfer price e. dual transfer price
- Explain one advantage and one disadvantage of the following transfer pricing methods: Cost Market based NegotiatedThis transfer prices basis is considered to be the most inferior one a. variable cost transfer pice b. full cost transfer price c. negotiatied transfer price d. external market transfer price e. dual transfer priceThe three common approaches to setting transfer prices include: the _____ price approach, where the transfer price is the price at which the product or service transferred could be sold to outside buyers; the _____ price approach allows the managers to agree among themselves on a transfer price; and the _____ price approach, where cost is used to set transfer prices. cost; market; negotiated market; cost; negotiated market; negotiated; cost negotiated; market; cost none of the above