Cost-based transfer pricing is a better method when the products being transferred are specialised in nature.

Question

Quizplus · Accepted Answer

Cost-based transfer pricing takes into account the actual cost of producing the products being transferred. This method is suitable when the products being transferred are specialised in nature, as it takes into account the unique costs associated with producing these products. This ensures that the transfer price is fair and reflects the actual cost of production, which is important for maintaining profitability and competitiveness. Therefore, cost-based transfer pricing is a better method when dealing with specialised products.

Cost-Based Transfer Pricing Is a Better Method When the Products