Dual-Rate Transfer Pricing

Home » CMA Glossary Term » Cost Accounting » Dual-Rate Transfer Pricing

Dual-Rate Transfer Pricing is a method used in cost accounting where two separate rates are applied to internal transactions between divisions of a company. The “dual rate” system typically involves a cost-based rate for the supplying division and a market-based rate for the receiving division. This approach aims to balance internal performance evaluation with external market conditions, promoting both divisional autonomy and overall corporate efficiency.

CMA Exam Academy 16-Week Accelerator Program