The preferred method for setting transfer prices generally is some form of:
A) Price based on negotiation.
B) Price based on industry cost averages.
C) Price based on historical costs.
D) Price based on market forces.

Question

Quizplus · Accepted Answer

Price based on market forces is the preferred method for setting transfer prices as it allows for the creation of a price that reflects the real market value. By relying on the supply and demand factors of the market, the transfer price can ensure that both parties will benefit from the transaction. This method also avoids the possibility of internal conflicts and subjective pricing.

The Preferred Method for Setting Transfer Prices Generally Is Some