Cost Allocation and Transfer Pricing at Anheuser-Busch InBev

Requirements:

1. Implement an appropriate cost allocation method to allocate indirect costs among Anheuser-Busch InBev's various product lines (e.g., beer, soft drinks, bottled water).

Product Line	Direct Costs ($)	Indirect Costs ($)
Beer	10,000,000	4,000,000
Soft Drinks	8,000,000	3,200,000
Bottled Water	9,000,000	3,600,000

2. Determine transfer pricing for internal transactions between Anheuser-Busch InBev's manufacturing and distribution divisions.
3. Evaluate the impact of different transfer pricing methods (e.g., market-based, cost-plus) on profitability.
4. Recommend a transfer pricing policy that aligns with corporate strategy and minimizes tax liabilities.