Under the negotiated transfer pricing approach, the minimum transfer price is established by the
A) purchasing division.
B) corporate headquarters management.
C) selling division.
D) corporate negotiator.

Question

Quizplus · Accepted Answer

The minimum transfer price under the negotiated transfer pricing approach is established by the selling division. This is because the selling division would not want to sell a product for less than its marginal cost or the opportunity cost of selling it internally, as doing so would not be in its best financial interest.

Under the Negotiated Transfer Pricing Approach, the Minimum Transfer Price