Meaning of Transfer Price in Management Accounting

Transfer Price in Management Accounting

Transfer Price is a monetary value or price at which one responsibility centre transfer or sell goods and services to another responsibility center within a Company. Simply, when various centre/division/departments of the company exchange goods and services with each other than in that case there is a need to find out monetary value (Called Transfer Price) at which the transfer should take place so that later it can be helpful in assigning cost and revenues properly and implementation of responsibility accounting can be done easily and effectively.

Reference: Management Accounting Book by Kalyani Publishers.  

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