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jerico jerico
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8 years ago
How does cost-based transfer price method help managers to determine transfer prices?
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Cost Accounting

Cost Accounting


Edition: 14th
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cyborgcyborg
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 Managers may choose a transfer price based on the cost of producing the product being transferred. The full cost of the product includes all production costs plus costs from other business
functions (R&D, design, marketing, distribution, and customer service). The cost used in cost-based transfer prices can be actual cost or budgeted cost. Sometimes, the cost-based transfer price includes a markup or profit margin that represents a return on subunit investment.
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jerico Author
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#2
8 years ago
This solved my problem perfectly, thank you for your kind input.
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#3
8 years ago
Sweet, you're welcome.
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