Page 8 - Manac Costing Test 2 class slides - 4. Transfer Pricing
P. 8
TRANSFER PRICING
Minimum Transfer Price
The minimum transfer price is the minimum that the
transferring/selling division can sell for without
making a loss.
Minimum transfer price =
Variable costs of the transferring division
Less: Variable costs saved on internal transfers
Add: Incremental fixed costs
Add: Opportunity cost
8
