Cost amounts that are transferred out of one department become the transferred in cost for the next department.

Question

Quizplus · Accepted Answer

This is the basic concept of the transfer pricing system which is used to allocate costs between different departments or divisions within an organization. The cost amounts are transferred from one department to another as they move through the production process, and the receiving department considers these transferred costs as their own.

Cost Amounts That Are Transferred Out of One Department Become