The price charged by one unit of an organization that supplies to another unit in the same organization is referred to as a(n)
A) Substitute price.
B) Transfer price.
C) Department price.
D) Organizational price.
E) Budget price.

Question

Quizplus · Accepted Answer

A transfer price is the charge by one unit in the organization for a good or service that it supplies to another unit of the same organization. For example, in automobile manufacturing, a transfer price may be affixed to components and subassemblies before they are shipped to subsequent business units for final assembly.

The Price Charged by One Unit of an Organization That