Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 13

What does expropriation mean, and what is the role of transfer pricing in this regard?

Step 1 of 2

Transfer pricing:

An exchange price for goods and services is the determination of transfer pricing during a company exchange its different business units. The intermediate products generate to other internal parts to the goods that can be final products sold to exterior customers. An organization of business units that can be examined profit centers, or investment centers, for performance estimation purposes transfer prices are compulsory. It cannot be possible to perform the performance metrics without transfer prices.