- This topic has 2 replies, 2 voices, and was last updated 3 years ago by .
Viewing 3 posts - 1 through 3 (of 3 total)
Viewing 3 posts - 1 through 3 (of 3 total)
- You must be logged in to reply to this topic.
OpenTuition recommends the new interactive BPP books for June 2024 exams, Get your discount code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › transfer pricing
sir in case of full cost+10%=transfer price, we take into consideration fixed production overheads, but ignore fixed administration costs always, right?
because admin and selling costs would not be incurred as its an internal transfer.
in other words fixed administration overheads recovered through external sales only?
There are no rules as to how a company fixed a transfer price.
If they choose to adopt a full cost plus approach then it will usually be based on the full production cost (and not admin and selling costs). In an exam question that is what we will assume, unless obviously the question specifically says something different.