​When Considering Setting the Transfer Price at the Market Price

question 50

Multiple Choice

​When considering setting the transfer price at the market price of a product similar to the intermediate good that is already available on the market

• A)​It is appropriate to ignore that the market price includes a margin above marginal cost
• B)Consider whether the product on the market includes costly features your downstream division does not use
• C)It is OK if the product on the market is inexpensive because its quality is lower than you use
• D)​If it is similar enough,it is justification for you producing it in-house

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