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Managerial accounting focuses on the generation of information for use by management and much of that information is about costs. One particularly important area of

Managerial accounting focuses on the generation of information for use by management and much of that information is about costs. One particularly important area of cost accounting is the concept of transfer pricing. This refers to the allocation of costs from one part of the business to another. If goods are being transferred or service are being provided between internal users, the issue to be addressed is whether or not internal users should be charged for the goods and/or services and at what rate?

Write a brief [3-4 page] paper stating whether or not transfer pricing/cost allocation should be used as a method of charging internal users for goods or services received by another part of the business.

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