The most common value used for transfer pricing is:
A)Total fixed costs.
B)Total fixed and variable costs.
C)Market value less fixed costs.
D)Market value.

Question

Quizplus · Accepted Answer

The most common value used for transfer pricing is market value. This value reflects the fair price that one division or subsidiary of a company would pay another division or subsidiary for goods or services that are being transferred between them. Using market value as the transfer price ensures that both parties are treated fairly and the transaction reflects the true economic value of the goods or services being exchanged.

The Most Common Value Used for Transfer Pricing Is