COST ACCOUNTING
TRANSFER PRICING
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
Sale of finished products
|
|
Provision of Contract Manufacturing Services
|
|
Purchase of raw materials
|
|
Sale of raw materials
|
Detailed explanation-1: -Material procurement is the process of researching, selecting, ordering, and paying for the raw materials required for constructing a building or structure. Procurement of any kind involves identifying and selecting vendors or suppliers, negotiating prices and terms, and awarding contracts.
Detailed explanation-2: -It is a form of outsourcing. In a contract manufacturing business model, the hiring firm approaches the contract manufacturer with a design or formula. The contract manufacturer will quote the parts based on processes, labor, tooling, and material costs. Typically a hiring firm will request quotes from multiple CMs.
Detailed explanation-3: -A manufacturing contract establishes the service agreement between a product developer and manufacturer. The contract will cover details such as unique product specifications, order numbers, inventory details and payments. With a signed manufacturing contract in place, your product will be ready to market in no time.