Make a report which is based on the topic of "Transfer Pricing". The paper would initially introduce the concept. The objectives and methods of transfer pricing. Transfer pricing methods such as market based, share profit relative to cost, marginal cost based, full cost based, cost plus markup based and negotiation based. Paper will analyse problems and cases using each transfer pricing methods. Then final paper will explain and illustrate the basis of setting of transfer price using variable costs, Full cost and principles behind allowing for Intermediate markets.

Specifically provide examples with calculations that include taxes for the following scenarios: (1) a Canadian parent with two Canadian subsidiaries, each in a different province. Research the corporate tax rates in the two provinces that you pick and use an overall federal plus provincial tax rate for each subsidiary. (2j a Canadian parent with two foreign subsidiaries. Similarly as with (1), research the tax rates in the two countries. Report should show how transfer prices can distort the performance assessment divisions and how the decisions for the transfer pricing are made.Transfer pricing decision at different capacity levels, different demand levels. International transfer pricing and Currency Management. The report should then compare the divisional performances and recognize the problems of doing so and responsibility of division as responsibility centre. Then the report should discuss the cases regarding the conflicts between the divisions. Proposals to resolve the conflicts such as dual rate transfer pricing system and two-part transfer pricing system. Then report should discuss the likely consequences of performance measurement within organization. It should evaluate the effects of transfer prices. Setting of transfer price where the profit of the organisation can be higher.

It would also discuss about the goal congruence, analysis of behavioural consequences, analysis of overall benefit to company, range of transfer price and advise on alternative to current transfer pricing system.