Journal of Accounting and Management Information Systems (JAMIS)


Transfer pricing and responsibility accounting

Supp/2007 ,   p 547..556

Author(s):  
Georgeta VINTILA
Eugen BRADEAN


Keywords:   Transfer prices, investment center, profit center, responsibility accounting system, common fixed assets

Abstract:  

The paper intends to underly the relevance and utility of one key element in the accounting domain, respectively „transfer pricing”, but also its implications in an accounting environment related to this aspect. In this purpose we will depict the following main problems/aspects: methods of transfer pricing including their advantages and limitations, aiming to distinguish between the differences of different concepts of full costing and variable costing as well as showing a cost income statement in CVP analysis. In addition, we aim to explain in-depth the distinction that should be made between the concept of cost center, profit center and investment center. At the same time our paper is arguing the contribution of responsibility margin and the need of a responsibility center information, as well as explaining the usefulness of the contribution margin and responsibility margin in making short and long term decisions.



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