When Cadillac buys headlights from Delco (both of which are divisions of General Motors), ____ pricing occurs.
A) base-point
B) zone
C) transfer
D) uniform geographic
E) matrix

Question

Quizplus · Accepted Answer

Transfer pricing occurs when a company (in this case, Delco) sells goods or services to another company within the same corporate family (in this case, Cadillac) and sets the price for the transaction. This helps General Motors to allocate profits and losses between its divisions.

When Cadillac Buys Headlights from Delco (Both of Which Are