Two contract terms that reduce transfer pricing problems are:
A) double markups and two-part pricing.
B) quotas and double markups.
C) exclusive territories and two-part pricing.
D) two-part pricing and quotas.

Question

Quizplus · Accepted Answer

Two-part pricing and quotas are contract terms that reduce transfer pricing problems. Two-part pricing involves setting a fixed fee for a specific product or service, and then a variable fee based on usage or volume, which can discourage inflated transfer prices. Quotas limit the amount of goods or services that can be transferred between related parties, which can prevent excessive prices and ensure fair market value is achieved. Double markups and exclusive territories do not directly address transfer pricing issues.

Two Contract Terms That Reduce Transfer Pricing Problems Are