Which is not a way to set a transfer price?
A) External market price
B) Negotiation
C) Replacement cost
D) Standard unit-level cost

Question

Quizplus · Accepted Answer

Replacement cost is not typically a method used to set a transfer price. Transfer pricing usually involves the external market price, negotiation between divisions, or standard unit-level cost to determine the price at which goods and services are transferred between divisions within the same company. Replacement cost refers to the cost to replace an asset at the current market price, which is not directly related to the concept of transfer pricing.

Which Is Not a Way to Set a Transfer Price