Which prices are recorded by departments under a dual-rate transfer pricing system? Selling Purchasing
Department Department

Question

Quizplus · Accepted Answer

Under a dual-rate transfer pricing system, the selling department records the market price as the transfer price and the purchasing department records the variable cost as the transfer price. Therefore, the prices recorded by the selling and purchasing departments are market price and variable cost respectively. Option D is the only choice that reflects this.

Which Prices Are Recorded by Departments Under a Dual-Rate Transfer