The general rule for transfer pricing is stated as:
A) Transfer price = additional outlay cost per unit incurred because goods are transferred
B) Transfer price = opportunity cost per unit to that organization because of the transfer
C) (A - B), above
D) (A + B), above

Question

Quizplus · Accepted Answer

The general rule for transfer pricing involves considering both the additional outlay cost per unit incurred because of the transfer (A) and the opportunity cost per unit to the organization because of the transfer (B). Therefore, the correct transfer price is the sum of these two costs (A + B).

The General Rule for Transfer Pricing Is Stated As