What are the three methods for determining transfer prices?

Q: What Is Quantity Discount Analysis Illustrated?

A: Cost:   It is the economic value of resources incurred by a firm to manufacture a product or render…

Q: Define the term price-takers.

A: Price takers is the term used for individual or a company which cannot influence the price of a…

Q: What is a transfer price? What are the three main approaches to setting transfer prices?

A: Transfer pricing:   Transfer pricing refers to the setting of prices for goods and services that are…

Q: A. Define transfer pricing and elaborate on FOUR (4) of its purposes.

A: Transfer pricing is the price which is to be calculated if there is any transaction between related…

Q: What is a price standard?

A: Variance: Variance refers to the difference level in the actual cost incurred and standard cost. The…

Q: . What are the three principle objectives of cost accounting system?

A: Cost accounting system is a system in which all the costs related to manufacturing, selliing the…

Q: What do you understand by rate of markup on cost and rate of markup on selling price, illustrate…

A: Answer: Mark-up is nothing but the difference between a good or service’s selling price and its…

Q: What Is the Benefit-Cost Ratio Calculation?

A: Benefit-cost ratio: It can be defined as a financial ratio that shows a relationship between the…

Q: Describe three alternatives of cost-plus pricing methods?

A: Cost-plus pricing is a method in which the selling price is set by evaluating all variable costs a…

Q: What is a transaction price?

A: Transaction price: It is the price of a service or a good which is expressed relative to the similar…

Q: What is cost allocation? Give three examples?

A: Cost allocation :Cost allocation is the allocation of cost to several cost objects such as…

Q: Define what net sales?

A: Net sales means the amount of revenue earned from selling the goods or services in which business…

Q: Which of the following transfer price approaches is used when the transfer price is set at the…

A: Transfer Price  : Price at which related parties transact with each other is known as transfer…

Q: What is the perform

A: one of the objectives of transfer pricing is to performance evaluation and improve the same . fair…

Q: Explain how negotiation between the supplying and buying units may be used to set transfer prices.…

A: Cost accounting is the branch of accounting that inspects the cost structure of a business. This…

Q: How does capacity affect transfer pricing decisions?

A:

Q: What are the three major influences on pricing decisions?

A: Pricing Decisions:Pricing decisions are those decisions that are related to ascertain the price of a…

Q: B. In deciding a transfer pricing method, advise management on: i. negotiated transfer pricing ii.…

A: Transfer pricing is the price which is to be calculated if there is any transaction between related…

Q: Describe four methods by which transfer prices may be set.

A: Transfer pricing is the method used to determine the price of goods or services when they are being…

Q: d. If the negotiated price approach is used, what would be the range of acceptable transfer prices?…

A: The Transfer Pricing between the divisions should be such that company will not incur any decrease…

Q: What is a quantity standard? What is a price standard?

A: Quantity Standard : A quantity standard is the amount of an input, such as labor time or raw…

Q: Define the term Purchase Volume?

A: INTRODUCTION Purchases  In accounting, the cost of making purchases during a time period with the…

Q: Define transfer price

A:

Q: Whats the difference between prime and conversion costs?

A: Prime cost: It is the cost which is incurred for manufacturing a product. It includes direct…

Q: What is one potential limitation of full-cost-based transfer prices?

A: Full cost based transfer pricing means transfer price based on total product cost per unit which…

Q: A cost - based transfer price considers the cost of producing the goods when determining the price.…

A: At the time of determining the prices of the goods, the cost of goods-producing is required to be…

Q: How is conversion costs per equivalent unit calculated?

A: The cost per unit is calculated as total cost divided by number of units.

Q: What is meant by Transfer price and why transfer prices are needed? 2- Distinguish between Traceable…

A: Meaning of Transfer Price, Traceable and Common cost is given below,

Q: The three common approaches to setting transfer prices include: the _____ price approach, where the…

A: There are three approaches, cost, market and negotiated.

Q: Explain price/EBITDA ratio

A: The EV/EBITDA ratio compares a company's enterprise value to its earnings before interest, taxes,…

Q: Define the term price-setters.

A: When a company cannot dictate prices then it is known as price taker. On the contrary, when a…

Q: What are the three common features of cost management?

A: Cost management:Cost management is a type of management accounting that estimates expenses involved…

Q: Explain the objectives of transfer pricing and describe the advantages anddisadvantages of various…

A: Transfer pricing in tax and accounting relates to the laws and procedures for the selling/buying…

Q: Identify the relative advantages and disadvantages of basing transfer prices on total costs,…

A: Please find the answers to the above questions below:

Q: Identify three cost-based transfer prices. What are the disadvantages of cost-based transfer prices?…

A: Transfer Pricing: It is the value at which goods and services are transferred from one unit to…

Q: What should the transfer price be and why?

A: Given that: Transfer price as proposed by Top Division = $256 Price that is charge to outside…