________ is an approach for establishing a market-based transfer price.
A) Full cost plus a normal profit markup
B) External market price less selling and delivery costs saved from selling internally
C) External market price plus a profit markup
D) Variable cost plus unavoidable fixed cost

Question

Quizplus · Accepted Answer

B) External market price less selling and delivery costs saved from selling internally is an approach for establishing a market-based transfer price. This method reflects the savings from not having to sell the product externally, which can make the transfer price more reflective of the actual cost to the company.

________ Is an Approach for Establishing a Market-Based Transfer Price