What is the term for the transfer price that would leave the selling division no worse off if the good is sold to an internal division?
A)the negotiated transfer price
B)the minimum transfer price
C)the maximum transfer price
D)the coordinated transfer price

Question

Quizplus · Accepted Answer

The term for the transfer price that would leave the selling division no worse off if the good is sold to an internal division is known as the minimum transfer price. This means the transfer price cannot be lower than the variable cost of producing the product. If the transfer price is lower than the variable cost, the selling division will be better off selling to an external customer rather than selling internally to another division.

What Is the Term for the Transfer Price That Would