Internal Pricing

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Definitions

Full-Cost Transfer Prices Transfer Pricing Internal Pricing Managerial Accounting Decision Making Cost Information

Full-cost transfer prices are internal pricing strategies where transfer prices are set based on full cost pricing but do not include a profit margin for the supplying division. This method is widely used but can lead to issues if cost information is inaccurate.

Definitions

Negotiated Transfer Prices

Negotiated Transfer Prices Internal Pricing Transfer Pricing Divisional Negotiation Corporate Finance Internal Trade Managerial Accounting

Transfer prices set by negotiation between the supplying and receiving divisions of an organization, typically deemed appropriate when there is an imperfect market for the goods and services exchanged.