As you know on my blog, much of the content I create is in direct response to student questions, problems or challenges and this post is no different. A number of people have been left confused when it comes to understanding the calculations needed when it comes to determining a transfer price. This is nothing […]

Okay, so hopefully you’ve read my guide on transfer pricing, so now let’s test your understanding by setting you a few questions to answer… Question 1 Question 2 Question 3 Click here for the solutions What next? You can access more revision questions here Ready to try a mock exam question on transfer pricing? Click […]

So, you’ve been through my transfer pricing guide and have attempted the revision questions to test your understanding. Now we come to the crunch. Can you answer exam standard questions? Well, let’s find out… NB. Once you’ve attempted them, you can click on the link at the bottom to find the solutions. Ninja Tip: Attempt […]

Here are the solutions to the revision questions set earlier… Solution to question 1: Answer $40 The transfer price will be $40 as we assume marginal cost is equal to variable cost and that there is excess capacity unless stated otherwise.  Solution to question 2: i) Minimum Transfer Price Answer $9 The minimum transfer price […]

As promised, let me walk you through the solutions to the transfer pricing mock exam questions you tried earlier… Solution to question 1: Answer £8 To maximise group profit we need to set the transfer price at the lowest price available. In most cases, and in this scenario, the lowest transfer price is marginal cost […]