When considering setting the transfer price at the market price of a product similar to the intermediate good that is already available on the market
A)It is appropriate to ignore that the market price includes a margin above marginal cost
B)It is OK if the product on the market includes costly features your downstream division does not use
C)Consider whether the product on the market is inexpensive because its quality is lower than you use
D)If it is similar enough,it is justification for you producing it in-house

Question

​When considering setting the transfer price at the market price of a product similar to the intermediate good that is already available on the market
A)​It is appropriate to ignore that the market price includes a margin above marginal cost
B)It is OK if the product on the market includes costly features your downstream division does not use
C)Consider whether the product on the market is inexpensive because its quality is lower than you use
D)​If it is similar enough,it is justification for you producing it in-house

Quizplus · Accepted Answer

The Answer of ​When considering setting the transfer price at the market price of a product similar to the intermediate good that is already available on the market
A)​It is appropriate to ignore that the market price includes a margin above marginal cost
B)It is OK if the product on the market includes costly features your downstream division does not use
C)Consider whether the product on the market is inexpensive because its quality is lower than you use
D)​If it is similar enough,it is justification for you producing it in-house

​When Considering Setting the Transfer Price at the Market Price

When Considering Setting the Transfer Price at the Market Price