Cost-based transfer pricing is that particular kind of transfer pricing in which, the basis to charge the prices from one division to another division, is the production cost of the unit. The calculation of production cost can take either of the following forms.
The formula to calculate minimum transfer price is given below:
The biggest advantage of this method of transfer pricing is that it actually includes all the direct costs incurred by the selling division. Other strengths include easy computation of costs, multiple sub-methods of cost basis etc.
The weaknesses of this method of transfer pricing include the likelihood that the buying division may purchase it from outside supplier if lower prices are offered, loss of the opportunity of profits that could have been gained from outside customers by selling division ...
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(Cost-Based Approach Assignment Example | Topics and Well Written Essays - 250 Words)
“Cost-Based Approach Assignment Example | Topics and Well Written Essays - 250 Words”, n.d. https://studentshare.net/finance-accounting/469189-cost-based-approach.
Information technology comes in by capitalizing on the requirement for green technology that carbon tax will necessarily generate and helping provide the know-how, expertise and research to contribute to the green revolution.
The industry provides services such as maintenance, repairs and rehabilitation of existing structures. The industry comprises of three main sectors, which include building construction, heavy and civil engineering and specialty trade contractors (Whaples, 2006).
1. Activity Based Costing (ABC) is the perfect cure for the problem of overhead allocation within organisations. Critically evaluate this statement.
In general, activity based costing (ABC) has been largely described as an alternative method of allocating overhead costs based on logic rather than arbitrarily imputing cost entirely to resulting production output.
Having strong presence in all the states of U.S. we can focus on an issue troubling a particular state specifically The Washington D.C., and then solving it can help us in the implementation of our corporate social responsibility maneuver (Mullerat and Brennan, 2011).
BSC is an effective approach which helps to evaluate organisational performance from different perspectives, thereby assisting in proper planning and control system. Besides, BSC also helps in implementing process based approach to organisational management.
Accounting for decision making Contents Contents 2 Introduction 3 Effectiveness of Traditional and Activity Based costing system 7 Effectiveness of Traditional Based costing system 7 Effectiveness of Activity Based Costing 10 Conclusion 13 References 14 Introduction Costing systems are types of information systems which require a particular type of information like the number of units produced and the number of direct labour hours of value that are involved in the process. These data are put as input into the costing system and the specific methodology of the costing system is used to produce information like the cost of the product and other important information as the output. The same da
Ford Motor Company produced 5.532 million automobiles in its over 90 plants and facilities spread worldwide with a revenue collection of U.S $ 134.3 billion and U.S $ 15.99 billion in Equity and a net income of U.S 5.664 billion (Operating Highlights: Annual Report, 2008, p.
Holistic approach of health promotion for behavior modification through broad health education and a life course approach for promotion of healthy behavior may be the solution of many such problems, of these are attempted early in life. Thus a holistic intervention in childhood may indeed bring about the desired individual behavioral changes, which may be imbibed and continued into the adulthood leading to control of the adult burden of disease.
According to the author of the article, the evolution of the field of Management Accounting as a separate branch of accounting dates back to the late 1930s. It was during this decade Ross G. Walker joined the faculty of the Harvard Business School. He came from a successful management position in a business corporation.
FRS 13 measures the fair value of assets or liabilities; recognition through IFRS 13 is to bring comparability and consistency in financial statements and reporting. IFRS 13 has introduced some methods of valuation of assets through fair value (Anson and Drews, 2007).
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