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transfer pricing

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › transfer pricing

  • This topic has 1 reply, 2 voices, and was last updated 7 years ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
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  • November 24, 2017 at 5:25 pm #417858
    adarsh1997
    Participant
    • Topics: 646
    • Replies: 282
    • ☆☆☆☆

    ” The fixed costs of the selling division become variable costs in the transfer price of the buying division.”

    – Could you explain how could that be a disadvantage of setting a TP at full cost plus?

    November 24, 2017 at 5:29 pm #417864
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54724
    • ☆☆☆☆☆

    Because the fixed costs of the selling division will not change by transferring more. Using full cost plus will be charging as though they are changing.

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  • The topic ‘transfer pricing’ is closed to new replies.

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