CA - FINAL
1342 Points
Joined March 2008
In cost based transfer pricing there are two types
1. Actual cost method : Under this output of one division can be transfered to another divison at actual cost so that fixed cost is recovered.
2. Variable cost method tranferor will transfer their output at VC. This method is attractive to the bying division but not for sellign division. When there is idle capacity in the sellign divsion this method is used