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Define Define (a)Negotiated transfer pricing method (b)Marketing based transfer pricing method Effect of each method on the divisional performance

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Accounting

Define

Define

(a)Negotiated transfer pricing method

(b)Marketing based transfer pricing method

Effect of each method on the divisional performance

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3.9 Ratings (370 Votes)
Answer a Negotiated transfer pricing method Arranged Negotiated costs are commonly favored as a center arrangement between market costs and costbased costs Under arranged costs the supervisors included act much equivalent to the chiefs of free organizations Exchange methodologies might be like those utilized when exchanging with outside business sectors On the off chance that the two divisions are allowed to manage one another or in the outside market the arranged cost will probably be near the outer market cost In the event that the majority of a selling divisions yield can not be sold in the outer market that is a segment must be sold to the purchasing division the negotiated cost will probably be not exactly the market cost and the absolute edge will be shared by the divisions The conditions under which an arranged exchange cost will be fruitful include 1 Opportunity to Buy or Sell Outside This gives the fundamental order to the haggling procedure 2 Sharing of all Market Information Among the Negotiators This should empower the arranged cost to be near the open door cost of one or ideally the two divisions 3 Some Form of Outside Market for the Intermediate Product This keeps away from a reciprocal imposing business model circumstance in which the last cost could shift over too vast a range contingent upon the quality and ability of every moderator 4 Backing and Occasional Involvement of Top Management The gatherings must be encouraged to settle most question By themselves generally the advantages of decentralization will be lost Top administration must be accessible to intercede    See Answer
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DefineDefine(a)Negotiated transfer pricing method(b)Marketing based transfer pricing methodEffect of each method on the divisional performance

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