Explain about intra company transfer pricing, Managerial Accounting

Assignment Help:

Intra company transfer pricing

A company engaged in production may have several segments division or departments doing production jobs or manufacturing party or fully finished goods. These division may require intra transfer of the goods manufacture by them for a purpose that the finished goods of a division may be used as raw material by the other for further working or proceeding to make another or fully finished goods. The question arises at what price the gaoods should be transferred by one division to the other.

In most of the cases it is the cost price if it is so no division can exhibit its own efficiency of working and can be held responsible for its inefficient. To avoid it each division is treated as semi autonomous in character and it is added to they division it would no doubt fetch greater revenue to itself but the transferee division would be put to s loss as its raw material coming to it form that division would be more costly and therefore this transferee division may like to buy directly from the market rather than to have it from its co division. Therefore in this situation no division would like to fix a price for transfer higher than the market price.

 


Related Discussions:- Explain about intra company transfer pricing

State the steps for standard costing system, State the steps for Standard c...

State the steps for Standard costing system standard costing system involves the following steps 1) Setting-up of standards for each element of cost: standards should be s

Cost estimation, engineering method of cost estimation

engineering method of cost estimation

What is production cost, What is Production cost It begins with the sup...

What is Production cost It begins with the supplying of materials, labour and services and ends with the primary packing of the product. Therefore, it includes the cost of d

Explain the scope of cost accounting, Explain the Scope of cost accounting ...

Explain the Scope of cost accounting Scope of cost accounting: the scope of cost accounting is very wide and includes the following: 1 cost ascertainment: it deals with t

Full service recourse factoring, Full Service Recourse Factoring : In this ...

Full Service Recourse Factoring : In this kind of factoring the client has to bear the risk of default made through the debtors. There the factor had advanced funds against book de

Excel formulas, I only need the formulas in excel put in.

I only need the formulas in excel put in.

Multi-collinearity, Multi-collinearity Multiple regression analysis is ...

Multi-collinearity Multiple regression analysis is based on the assumption that the independent variables are not correlated with each other, whenever the independent variables

Case study, Anderson Nuclear Power Plant will be "mothballed" at the end of...

Anderson Nuclear Power Plant will be "mothballed" at the end of its useful life (approximately 20 years) at great expense. The expense recognition principle requires that expenses

International transfer pricing, International Transfer pricing Internat...

International Transfer pricing International transfer pricing refers to the determination of prices to be charged between related persons and in particular within a multination

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd