The Transfer price for a product is mostly lower than the market price of the product.
It prevents arbitrary charging of prices.
Which of the statements given above is/are correct?
Correct Answer:
(C)
Both 1 and 2
Transfer price for a product is mostly lower than the market price of the product, therefore it results in cost savings for various departments.
It inculcates transparent pricing mechanisms and prevents arbitrary charging of prices.
It lowers the duty costs by shipping goods into high-tariff countries at minimal transfer prices so that duty base and duty are low.