The Price at Which the Exchange Between Divisions Takes Place

question 69

Short Answer

The price at which the exchange between divisions takes place is referred to as
A)Intercompany relay price.
B)Transfer price.
C)Both intercompany relay price and transfer price.
D)Neither intercompany relay price nor transfer price.

• A)Intercompany relay price.
• B)Transfer price.
• C)Both intercompany relay price and transfer price.
• D)Neither intercompany relay price nor transfer price.

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Definitions:

Weighted-Average Method

A cost accounting method that assigns the average cost of goods available for sale to both ending inventory and units sold.

Assembly Department

A department within a manufacturing facility where components are assembled into finished products.

Materials

The raw items or components used in the manufacturing process to produce goods or services.

Conversion Costs

The combined costs of direct labor and manufacturing overhead incurred to convert raw materials into finished products.