A firm that charges a price to another unit in the company sets the ________ price for goods that it ships to its foreign subsidiaries.
A) original price
B) transfer price
C) margin price
D) break-even price
E) customer value price

Question

Quizplus · Accepted Answer

When a firm charges a price to another unit in the same company, it is known as a transfer price. This transfer price is used to determine the cost of goods supplied to foreign subsidiaries. Therefore, the best choice is B) transfer price.

A Firm That Charges a Price to Another Unit in the Company