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Transfer Pricing Computation

This solution presents the implications of Transfer Pricing and clarifies and explains the relationship with inter company transfer. The study identifies contribution to overhead. Discussion focuses on three options for transfer pricing: cost plus, fair market value, and manager negatiated.

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Solution Summary

Calculates transfer pricing with formulae in excel for clarity and formula reference, with definitions and explanation. Three types of Transfer Pricing are reviewed: cost plus, fair market value, and manager negotiated.