Question: Assume that your cousin Matilda Flores manages a local glass
Assume that your cousin Matilda Flores manages a local glass shop that was recently bought by a company that produces custom picture frames. As a result, Matilda will soon be providing glass to the Frame Division. She has heard upper management mention a transfer price but does not understand what this term means or how it might affect her division. Briefly explain transfer pricing to Matilda and how it will impact her division’s performance in the future.
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