The frozen foods division of Swanson purchases food trays and boxes from the packaging division. The form of pricing used to charge the frozen foods division is called:
A) zone pricing.
B) base-point pricing.
C) business-unit pricing.
D) transfer pricing.
E) price discrimination.

Question

Quizplus · Accepted Answer

Transfer pricing is the method used to set prices for transactions between divisions within the same company, such as the frozen foods and packaging divisions of Swanson.

The Frozen Foods Division of Swanson Purchases Food Trays and Boxes