Question: 1) How does one compute a target cost when the market determines a product price? 2) How does one determine a transfer price using the

1) How does one compute a target cost when the market determines a product price?

2) How does one determine a transfer price using the negotiated, cost-based approach? A market-based approach?

3) Describe cost-plus pricing?

4) Describe target selling price?

5) Size of the markup (the plus) depends on the desired return on investment for the product. Why?

6) What are the limitations of Cost-Plus pricing?

7) What are the three ways to determine transfer price?

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