Question

When one unit charges another unit in the same company for goods it ships to its foreign subsidiaries, the charge is called a(n) ________ price.a. margin priceb. costumer value pricec. transfer priced. break even pricee. original price

Answer 1

c. transfer price

Step-by-step explanation:

Transfer price is a charge that occurs when one entity charges another entity under the same owner.

So the given scenario where one unit charges another unit in the same company for goods it ships to its foreign subsidiaries, it is called transfer price.

Transfer prices are usually reported in financial statements so they can be monitored effectively.

Standard price on the other hand is sum total of all cost required to produce a product. It can be used effectively to make a budget or make future estimates.