The price charged by one unit of an organization that supplies to another unit in the same organization is referred to as a(n)
A)substitute price.
B)transfer price.
C)department price.
D)organizational price.
E)budget price.

Question

Quizplus · Accepted Answer

Transfer price is the term used to refer to the price charged by one unit of an organization to another unit in the same organization. It is used to determine the revenue of each unit and affects the profitability, tax liability, and ultimately, the overall performance of the organization. The choice A, C, D, and E are not correct terms for this concept.

The Price Charged by One Unit of an Organization That