When There Is an Outside Market for an Intermediate Product

question 15

Multiple Choice

When there is an outside market for an intermediate product that is perfectly competitive, the most equitable method of transfer pricing is

• A)market price.
• B)production cost pricing.
• C)variable cost pricing.
• D)cost plus markup pricing.

---

Definitions:

Sampling Error

The discrepancy between a statistical measurement based on a sample and the actual population parameter.

Proportion

A part or fraction of a whole, often expressed as a percentage or ratio, reflecting the relative size or quantity of one quantity compared to another.

Population Proportions

Population proportions represent the fraction or percentage of members in a population that possess a particular attribute.

Confidence Level

The degree of certainty or probability with which one can expect a result to fall within a specified range.