Minimum Transfer Price Can Be Arrived at by Adding Incremental

question 139

True/False

Minimum transfer price can be arrived at by adding incremental cost per unit incurred up to the point of transfer with the markup required.

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Definitions:

Compute

To calculate or process using a computer or mathematical operations.

Just-In-Time Manufacturing

A production strategy that strives to improve a business's return on investment by reducing in-process inventory and associated carrying costs, producing goods only as needed.

Days' Sales

A financial metric that calculates the average time it takes for a company to turn its accounts receivable into cash.

Raw Materials Inventory

Items and components stored for future use in the production process, not yet modified or incorporated into a finished product.