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What type of price is the amount one business unit charges for a good or service provided to another within the organization?

A) Transfer
B) Control
C) Budgetary
D) Functional

1 Answer

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Final answer:

A transfer price (option A) is the amount one business unit charges another within the organization.

Step-by-step explanation:

The type of price that one business unit charges another within the organization is A) Transfer price.

A transfer price is the amount one unit of an organization charges for a product or service when it is transferred to another unit within the same organization. This price is used for internal purposes to determine the profitability of different units or divisions.

For example, if a manufacturing division sells a product to a sales division within the same company, the selling division would charge the buying division a transfer price to account for the cost and value of the product being transferred.

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