Český finanční a účetní časopis 2009(2):33-45 | DOI: 10.18267/j.cfuc.27

The Costing Formula Suitable for Pricing (Transfer Pricing) Decisions and Maximization of Business Value

Tomáš Buus
Ing. Tomáš Buus, Ph.D. - odborný asistent; Katedra financí a oceňování podniku, Fakulta financí a účetnictví, Vysoká škola ekonomická v Praze, nám. W. Churchilla 4, 130 67 Praha 3, Česká republika; <buust@vse.cz>.

This paper deals with different kinds of costing formulas, regarding the price-setting decisions, resp. transfer-pricing decisions and business value maximization. Results of theoretical research show that it is always suitable to separate fixed and variable costs, nevertheless retrograde costing formula is more convenient in competitive environment, whereas dynamic costing is more suitable in the case of monopoly. While reflecting the above, it is also necessary to take into account the multi-layer nature of product, including servicing and extraordinary requirements of customer (e.g. by using activity-based costing). The main determinant of success is not only the type of costing formula used, but also quality and detail of the data in information system.

Keywords: Costing; Transfer price; Cognition.
JEL classification: L11, M21, M40

Published: June 1, 2009  Show citation

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Buus, T. (2009). The Costing Formula Suitable for Pricing (Transfer Pricing) Decisions and Maximization of Business Value. Czech Financial and Accounting Journal, 2009(2), 33-45. doi: 10.18267/j.cfuc.27
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