Summary
Summary Transfer price
- Course
- Institution
this document outlines how to attempt questions step by step with examples
[Show more]
Seller
Follow
Talizamazoue
Reviews received
Content preview
Transfer pricing, TRANSFER PRICE RANGE
If you have a scenario where there will be partial external sales with NO opp cost and partial with opp cost you will have
2 transfer price ranges
➔ This is how I understand how to do a transfer price range!
NO OPP COST :
MINIMUM (transferor) MAXIMUM (transferee)
Cost of transferring internally: LOWER OF:
➔ Variable cost of product for the transferor + ➔ Net marginal revenue
transport to transfer internally for transferor ➔ Market price (price of purchasing the product
that is being transferred EXTERNALLY)
Variable cost is the price that the TRANSFEROR paid to Net marginal revenue
acquire the products for transfer ( FOR THE RECIEVER OF THE TRANSFER)
➔ SELLING PRICE
externally from the receiver unit (person who is
getting transfer )
➔ LESS VC
to sell those units externally EXCLUDING the cost
that transferor paid to acquire the products
SO if the receiver had to pay additional packaging
to sell the products that will be the VC
With opportunity cost:
MINIMUM MAXIMUM
Variable cost + opp cost LOWER OF :
➔ Net marginal revenue
➔ Market price
OPPORTUNITY COST: Same calculations above = this is for the TRANSFEREE
➔ Selling price that TRANSFEROR could sell in an
external market
➔ LESS: additional VC to sell this product externally
➔ LESS: variable cost that the TRANSFEROR had to
pay to purchase the products to sell
Variable cost
➔ Cost to purchase the products to sell
➔ PLUS cost of transport for INTERNAL transfer
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Talizamazoue. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $2.85. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
66579 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now