In the context of transfer pricing, dual pricing is:
A) Never used when numerous conflicts exist between two units.
B) The simultaneous use of two or more transfer pricing methods.
C) The use of two or more transfer pricing methods by the buyer only.
D) Not recommended because of negative behavioral consequences.
E) Not recommended because it conflicts with current income tax requirements.

Question

Quizplus · Accepted Answer

Dual pricing refers to the use of two or more transfer pricing methods simultaneously. It helps to eliminate the conflict between different units by providing a fair and reasonable pricing mechanism. The use of multiple pricing methods enables the organization to address the unique characteristics and challenges of each transaction, resulting in a more accurate allocation of profits and costs. Dual pricing is a commonly used transfer pricing technique in multinational corporations, especially those with complex structures and diverse operations.

In the Context of Transfer Pricing, Dual Pricing Is