Transfer price

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Transfer price is the price a company charges another unit in the company for goods it ships to foreign subsidiaries.

Definition

According to Marketing Management by Keller and Kotler (15th edition),

Transfer price. The price a company charges another unit in the company for goods it ships to foreign subsidiaries.

According to Cost Accounting by Horngren, Datar, Rajan (14th edition),

Transfer price. Price one subunit (department or division) charges for a product or service supplied to another subunit of the same organization.

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