Which One of the Following Determines the Transfer Price Based

question 26

Multiple Choice

Which one of the following determines the transfer price based on the seller's costs, plus a gross profit percentage determined from comparison of sales of the seller to those of unrelated parties?

• A) Wholesale-price method.
• B) Resale-price method.
• C) Net-price method.
• D) Cost-plus method.
• E) Comparable-price method.

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Definitions:

Diseconomies of Scale

A situation where a business's cost per unit increases as it produces more items, due to inefficiencies that arise with scaling up production.

Plant Size

Refers to the physical capacity or output level of a manufacturing or production facility.

Output Levels

The quantity of goods or services produced by a company, sector, or economy in a given period of time.

Long Run

A period in economics where all factors of production and costs are variable, allowing full adjustment to any change in economic conditions.