ACCA December Exams

Post comments & Vote in Instant poll >>

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for March 2025 exams.
Get your discount code >>

Transfer Pricing

This topic has 1 reply, 2 voices, and was last updated 5 years ago by Ken Garrett.

Viewing 2 posts - 1 through 2 (of 2 total)

Author
Posts
May 6, 2019 at 3:42 pm #515105
sureena
Member
- Topics: 29
- Replies: 11
In order for a firm to maximize its profit,
divisions should have autonomy to set intra divisional transfer prices YES
head office should impose transfer prices between divisions NO
Am I right?
May 6, 2019 at 5:44 pm #515119
Ken Garrett
Keymaster
- Topics: 10
- Replies: 10544
Wrong.
Head office should ensure that the company as an entity maximises profit and this will require it to set transfer prices. If divisions do it there is a chance that a division will maximise its own profit but that will not necessarily maximise company profit.
Author
Posts

Viewing 2 posts - 1 through 2 (of 2 total)

You must be logged in to reply to this topic.