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Transfer Pricing

This topic has 1 reply, 2 voices, and was last updated 3 years ago by John Moffat.

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November 30, 2021 at 4:08 pm #642115
HamzaYusuf
Participant
- Topics: 45
- Replies: 23
How many ways are there for setting a transfer price that is most likely to result in goal congruent behavior?
All of these approaches are used to set a transfer price:
1) Cost-plus transfer pricing
2) Opportunity cost
3) Market price
4) Sensible transfer pricing
Are those all approaches used in the PM exam?
November 30, 2021 at 4:37 pm #642128
John Moffat
Keymaster
- Topics: 57
- Replies: 54701
Everything that is needed for the exam in transfer pricing is explained in my free lectures on this.
The only method that ensures goal congruent behaviour is what you have called ‘sensible transfer pricing’ for the reasons I explain in my lectures.
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