The amount charged when one business unit sells goods or services to another business unit is called:
A) an opportunity cost.
B) a transfer price.
C) a standard variable cost.
D) a residual price.

Question

Quizplus · Accepted Answer

The amount charged when one business unit sells goods or services to another business unit is called a transfer price. This price can be determined through several methods, including cost-based, market-based, or negotiated pricing. It is important to establish an appropriate transfer price to ensure that both business units are fairly compensated and that overall profitability is maximized.

The Amount Charged When One Business Unit Sells Goods or Services