Page 6 - Manac Costing Test 2 class slides - 4. Transfer Pricing
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TRANSFER PRICING
Goals Of A Transfer Pricing System
• To motivate the divisional managers to make
decisions to the advantage of the company or group
as a whole (goal congruence).
• To ensure that each division’s performance is fairly
evaluated.
• The system should be simple to operate and
administer.
• The divisional managers should still have the ability to
make autonomous decisions.
• If possible, healthy competition between divisions
should be encouraged by the transfer pricing system.
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