Comment on the importance of transfer pricing and performance measures.
How do they relate? And why are they important in the business environment?
Some helpful websites:
This is a hot topic for individual profit centers and investment centers within a firm but often has no impact on the consolidated performance of the total firm. This is because transfer prices are the prices that units within a firm set to sell to each other. So, the sales price in one division is the same as the cost to another division. Any profit made in Step 1 because higher cost in Step 2 and so the ...
Your tutorial is 256 words and explains why transfer prices make performance evaluation difficult. An example is given.