Transfer Pricing – Choice

Abstract

An examination of the philosophy and methodology of transfer pricing is provided. The concept of transfer pricing is that, within a manufacturing company, one department, on transferring its output to another department, should regard this transfer as a sale and that there should be a definite policy on setting the selling price. The most usual methods of transfer pricing – cost, cost plus, market price and dual pricing, are evaluated and worked examples of transfer pricing implications in practice, included.

Citation

Galway, A. (1990), "Transfer Pricing – Choice", Management Decision, Vol. 28 No. 3. https://doi.org/10.1108/00251749010138298