Transfer pricing
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Transfer price is the price at which goods or services are transferred from one department to another, or from one group to another.
Transfer pricing is used when divisions of an organisation need to charge other divisions of the same organisation for goods and services they provide to them.
Transfer prices are a way of promoting divisional autonomy, ideally without perjudicing the measurement of divisional performance or discouraging overall corporate profit maximisation.
Tranfer pricing should be set at a level which ensures that profits for the organisation as a whole are maximised.
Last edited by Taejeah; 11-21-2008 at 12:20 AM.
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