Which method of transfer pricing should be followed when the supplier division is a monopoly producer or the user division is a monopoly consumer?

CS Executive · Corporate and Management Accounting · PYQS · December 2023
Which method of transfer pricing should be followed when the supplier division is a monopoly producer or the user division is a monopoly consumer?
(A) Cost based transfer pricing
(B) Market based transfer pricing
(C) Opportunity cost transfer pricing
(D) Negotiated transfer pricing

Answer & Explanation:

Correct Answer: Option (C)

Official answer key: (C).

Topics: Management Accounting

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