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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Transfer price II
sir i wanted to understand why the following statement is true?
“where a perfect market price exists and unit VCs and unit Selling prices are constant, the opportunity cost of transfer will be external market price or external market price less savings in selling costs.”
my only point is opportunity cost of internal transfer should be the LOST CONTRIBUTION from not being being able to make an external sale, not the external market price itself.
Because it’s the internal minimum transfer price(VCs + lost contrn/opportunity cost) that should be equivalent to external market price or external market price less any savings on selling costs.
The marginal cost plus the lost contribution will be equal to the external market price. The statement is true.