Given a competitive outside market for identical intermediate goods, what is the best transfer price, assuming all relevant information is readily available?
A) Standard production cost per unit.
B) Market price of the intermediate goods.
C) Actual full cost per unit plus a normal markup.
D) Market price of the final goods less any opportunity costs.

Question

Quizplus · Accepted Answer

The best transfer price in a competitive market for identical intermediate goods is the market price, as it reflects the fair value and opportunity cost of the goods.

Given a Competitive Outside Market for Identical Intermediate Goods, What