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edelynpl edelynpl
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What is a transfer price? List the four ways of determining a transfer price.
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Managerial Accounting

Managerial Accounting


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When organizations choose to decentralize its operations, divisions may end up exchanging goods and services with one another. A transfer price is the price at which the exchange between divisions takes place. The four ways of determining a transfer are:
•Market-based price
•Cost-based price
•Cost-plus-based price
•Negotiated price
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