Which of the following transfer pricing systems potentially takes the most time to establish?
A) Market-based
B) Dual-rate
C) Negotiated
D) Full-cost

Question

Quizplus · Accepted Answer

The negotiated transfer pricing system potentially takes the most time to establish because it involves discussions and concessions between the two divisions or companies involved in the transfer pricing arrangement. It can involve a lengthy negotiation process and may require external mediators to reach an agreement. In contrast, market-based transfer pricing relies on existing market prices, dual-rate transfer pricing uses two different rates based on predetermined criteria, and full-cost transfer pricing utilizes actual costs plus a markup, all of which are more straightforward and easier to establish.

Which of the Following Transfer Pricing Systems Potentially Takes the Most