marginal-cost transfer prices
- marginal-cost transfer prices
Transfer prices set by marginal cost pricing When there is no market for the goods and services that are bought and sold between the divisions of an organization, the transfer price should be the marginal cost, which is normally assumed to be short-term variable cost Setting transfer prices equal to marginal costs helps managers to identify the output levels that will maximize profits. There can be problems if managers do not have accurate cost information.
Big dictionary of business and management.
2014.
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maginal-cost transfer prices — Transfer prices set by marginal cost pricing. When there is no market for the goods and services that are bought and sold between the divisions of an organization, the transfer price should be the marginal cost, which is normally assumed to be… … Accounting dictionary
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transfer prices — The prices at which goods and services are bought and sold between divisions or subsidiaries within a group of companies. The transfer price is a cost to the receiving division and revenue to the supplying division: therefore the transfer price… … Big dictionary of business and management
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