_____ is an approach used for establishing a market-based transfer price.
A)Full cost plus a normal profit markup
B)External market price less selling and delivery costs
C)External market price plus a profit markup
D)Variable cost plus unavoidable fixed cost

Question

Quizplus · Accepted Answer

The approach of using the "external market price less selling and delivery costs" is a method for establishing a market-based transfer price. This method reflects the price that could be obtained on the open market, adjusted for the costs that are saved by not actually selling the product externally (such as selling and delivery expenses).

_____ Is an Approach Used for Establishing a Market-Based Transfer