What do you mean by dual pricing, Strategic Management

Assignment Help:

Q. What do you mean by Dual pricing?

Dual transfer pricing means setting one transfer price for the internal seller and another transfer price for the internal buyer.  The basic idea is to encourage trade by creating the most beneficial price for both parties.

  • Internal seller: The transfer price received would be set at the external market price e.g. the price that would normally be charged to external customers.
  • Internal buyer: The transfer price paid would be set at the sellers variable (marginal) cost of production.

The difference between the two transfer prices would need reconciling by head office when preparing the group consolidated financial results.  Dual pricing is a similar approach to the opportunity cost approach which is discussed later.


Related Discussions:- What do you mean by dual pricing

Show the modern methods of budgeting, Q. Show the Modern methods of budgeti...

Q. Show the Modern methods of budgeting? A flexible budgeting system produces many budgets projecting costs and revenues over different ranges of production or sales volumes.

Show the demerits of using return on investment, Q. Show the Demerits of us...

Q. Show the Demerits of using return on investment? The following disadvantages maybe experienced when choosing to use ROI as a primary performance measure. -  An accounting

Organisation strategic - human resources, Experienced staff of the organisa...

Experienced staff of the organisation contributes in the business expansion of the company. Additionally, the company also provides intensive immersion program for its frontline cr

Case study using blue ocean strategy, Astor Lodge & Suites, Inc. There are ...

Astor Lodge & Suites, Inc. There are two parts: part A: describe the Us hotel industry and competitive positioning and financial performance. Part B: study the Aus hotel industry a

Planning, what is describe as strength and weakness in strategic planning

what is describe as strength and weakness in strategic planning

Movie Exhibition Industry, Review trends in the general environment that af...

Review trends in the general environment that affect the movie exhibition business, and establish whether their effects are helpful or harmful to theater owners.

What is strategy & why strategy is important?, What Is Strategy & Why Strat...

What Is Strategy & Why Strategy Is Important? Managers at all companies facade three innermost questions in view strategically concerning their companies' current circumstances

Divisional structures – product organisation, Q. Divisional structures – pr...

Q. Divisional structures – product organisation? The functional structure is normally adopted by an entrepreneurial structure e.g. small business, because the organisation grow

Procedural history - sample case briefing, Procedural History: The pl...

Procedural History: The plaintiff filed an action for negligence under Texas law  and  the trial  court granted summary judgment in favor of the defendants.  All you are d

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