What are negotiated transfer prices?

Question

Quizplus · Accepted Answer

Negotiated transfer prices refer to transfer prices that are decided between the supplying and buying divisions when they can independently agree on a price. These prices are negotiated to ensure that both divisions benefit from the transaction and are usually decided based on factors such as market prices and available resources. Option A talks about transfer prices decided between a division and corporate headquarters, which is not the same as negotiated transfer prices. Option B talks about transfer prices negotiated with external customers, which is also not related to negotiated transfer prices. Option D talks about transfer prices agreed to by division management and employees, which is not the same as negotiated transfer prices.

What Are Negotiated Transfer Prices