Market price is the only price that a firm should use when transferring goods from one subunit to another subunit.

Question

Quizplus · Accepted Answer

A firm may use transfer pricing, which is the price used to transfer goods from one subunit to another within the same company. This price may not necessarily be the market price, and instead can be based on various factors such as cost, negotiated agreement, or a predetermined rate.

Market Price Is the Only Price That a Firm Should