Transfer pricing should equal
A) selling price.
B) opportunity cost.
C) total cost.
D) marginal cost.

Name: Transfer pricing should equal A) selling price. B) opportunity cost. C) total cost. D) marginal cost.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Transfer pricing should equal the opportunity cost of the selling division, which is the benefit given up by not selling to an outside customer. This ensures that both divisions are operating at efficient levels and that the overall profitability of the company is maximized.

Transfer Pricing Should Equal