Categorize the following transfer prices as being market-based, negotiated, or cost-based:
a. The market price of a widget is $25, the cost is $15, and the actual transfer price is $22, the market price less cost of sales commissions.
b. The manager of the packaging responsibility center agrees to package a special order for the shipping department for the cost of the packaging materials.
c. The Wilton Ball Division sells baseballs to the Wilton Combo Division for $5.00 each. The Ball Division sells a two-ball package to Dick’s Sporting Goods for $10.
d. After consulting with stand-alone accounting firms, the Accounting Division charges each of the 13 manufacturing plants in the company $545 per month for accounting services.

  • CreatedApril 17, 2014
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