Match the Items in the Two Columns Below by Entering

question 87

Short Answer

Match the items in the two columns below by entering the appropriate code letter in the space provided.
A. Cost-plus pricing
B. Market-based transfer price
C. Markup
D. Negotiated transfer price
E. Outsourcing
F. Target selling price
G. Time-and-material pricing
H. Virtual companies
____ 1. Contracting with an external party to provide a good or service.
____ 2. An approach to cost-plus pricing that uses two pricing rates.
____ 3. Product's selling price is determined by adding a markup to a cost base.
____ 4. Transfer price is determined by agreement of division managers.
____ 5. Companies that have no manufacturing facilities.
____ 6. Percentage applied to a product's cost.
____ 7. Price that will provide the desired profit on a product.
____ 8. Transfer price is based on existing prices of competing products.

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Definitions:

Credit Sales

Sales made by a business where payment is deferred to a later date, typically documented by an invoice.

Consulting Services

Professional services provided by experts who offer advice and expertise to businesses and individuals to improve their operations, strategy, and performance.

Journal Entry

A record of a transaction in the accounting journal that details which accounts are affected and in what way.

Payment Promise

A commitment by one party to pay another, often documented in a formal agreement or note.