สูตร
d. The results of the different transfer pricing strategies are shown in Table 10.2.
The situation above shows the importance to management of setting an optimal transfer price in order to maximize the profit of the firm as a whole. If the transfer price is too high, as here, the manufacturing (or transferring) division will produce too much, depressing the selling price and reducing overall profit. The marketing division would not want to buy as much as the optimal quantity, and again overall profit suffers.