Transfer pricing methods, Managerial Accounting

Assignment Help:

Transfer Pricing Methods

Transfer pricing methods are concerned with the alternative means by which a transfer price can be set and its impact on organizations gauged. Emmanuel and Otley bring together a number of views of transfer pricing methods in practice. Essentially, they report that there are three categories of transfer price: cost based, market based and negotiated. Within the surveys reported, in terms of very rough approximations, about 20% of companies used negotiated prices; about 30% of companies used market values and about half used cost based prices. For each category, a good degree of discretion existed to develop alternative bases at a detailed level. For market based prices, for instance, competitors' prices, list prices, most recent bid and values adjusted by a discount provided alternative bases. The description which follows does not go to such a level of detail but concentrates on four main approaches: absorption cost bases, variable cost bases, market value bases and negotiated value bases. A final section describes the use of linear programming.


Related Discussions:- Transfer pricing methods

FIFO, I WANT TO KNOW THE RULES FOR DOING LIFO AND FIFO

I WANT TO KNOW THE RULES FOR DOING LIFO AND FIFO

Homework.., given the above data what would the breakeven in units and doll...

given the above data what would the breakeven in units and dollars be if u wanted a necessary after tax profit of $ 36,000 (assume a 30% tax rate ) units __________ ales dollars _

Explain zero base budgeting, Introduction of zero base budgeting Steps ...

Introduction of zero base budgeting Steps involved in the introduction of zero base budgeting 1) Corporate objectives should be established and laid down in detail 2) Dec

Market value-transfer pricing methods, Market value There is universal ag...

Market value There is universal agreement that in competitive markets a market value based transfer price should achieve optimal results. In this circumstance, it can be expected

First cut analysis of costs , First Cut Analysis of Costs The allocati...

First Cut Analysis of Costs The allocation of costs and assets will produce a value chain that illustrates graphically the distribution of a firm's costs. It can prove reveali

Determine the companys bid, King Manufacturing has four categories of overh...

King Manufacturing has four categories of overhead. The four categories and expected overhead costs for each category for next year are as follows: Maintenance

Strategies in working capital management, No further banks were the sole so...

No further banks were the sole source of funds for working capital requires of the business sector. At current more finance options are obtainable to a Finance Manager to allow smo

Queuing problems, Queuing problems There are two main approaches to que...

Queuing problems There are two main approaches to queuing problems: •    simulation •    queuing theory formula Where simple situations apply, queuing theory should be used

Determine the creditors turnover ratio, Creditors turnover ratio ( or payab...

Creditors turnover ratio ( or payables turnover ratio) Meaning: this ratio establishes a relation ship between net credit purchases and average trade creditors. Objective

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