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Hello Sir,
for the transfer pricing ,as it is mentioned in Bpp Text that for the maximum price is the lowest possible price that the receiving division can get the product externally less the packing cost ,
but actually this packing cost we deduct it from the sending division marginal cost like Jun 2015 exam
so how it is said in the Bpp in that way and which is the correct one to do,
Thanks for help………
It depends who is paying for the packaging. If the receiving division is paying it, then the first statement is correct. If the selling division is paying it then the second is correct.
I do suggest that you watch our free lectures on transfer pricing.
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