Transfer pricing as systematical way of managerial accounting of liability centres
Journal Title: Visnyk Ternopilskoho natsionalnoho ekonomichnoho universytetu - Year 2016, Vol 2, Issue
Abstract
The article is devoted to transfer pricing as one of the most effective tools of flexible management. In order to maintain the necessary level of competitiveness of enterprises it is required substantial renovation and modernization of all aspects, including reducing costs, improving customer service. New realities demand the improving of production system, identification of new priorities, flexible response to constant changes in the environment. The aims of research is to determine the transfer price as an instrument of management in the system of management accounting. This article deals with the transfer pricing methods, their advantages and disadvantages and suggestions for pricing on the basis of the index of profitability of investments ROI are highlighted. In the process of research the scientific and special methods and techniques of knowledge are used. Accounting treatment of transfer price on the basis of ROI for the enterprise that manufactures and sells products and has a separate structural subdivision of raw materials supplying has been examined by means of modeling method. According to the results of investigation it is found that using pricing based on ROI in the calculation of transfer prices one must analyze the autonomy of each business unit to provide incentives for the workforce. The choice of option prices depends on the type of center, the specific conditions of the enterprise and performance of responsibility centers. The application of this approach will make it possible to assess the effectiveness of the responsibility centers and managers’ interest. Thus, the profit that company receives is advisable to allocate responsibility between the centers in proportion to the total income payment.
Authors and Affiliations
Myroslava Kulynych
Keywords
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