Please enable JavaScript.
Coggle requires JavaScript to display documents.
transfer price (variable cost (BU operates at a loss -> not include…
transfer price
variable cost
-
-
-
-
-
-
purcheasing division in its prices for customers cannot consider the loss of the selling division that it has to cover by its business
-
full cost
perchasing division's managers in order to reduce the cost have incentive to to monitor the cost of selling division
purcheasing division can invest in additional capacity in order to avoid buying from the selling division if TF is higher then the market price
-
-
-
full cost plus profit
all division can make profit and managers have incentive to be more efficient in order to increase profit
-
-
-
-