Cost sheet transfer price

Raw material costs should be estimated by direct computation from flow rates and material prices. The flow rates are deterrnined from flow sheet material balances. The unit prices are obtained from vendors, company purchasing departments, or the Chemical Marketing Reporter. For captive raw materials produced internally, a suitable transfer price must be estabHshed. Initial catalyst charges can be treated as a start-up expense, working capital component, or depreciable capital, depending on the expected catalyst life and cost. Makeup catalyst is frequendy treated as a raw material. 

Accounting. Cost elements were scattered throughout the company and its parent s accounting statements, so there was the aspect of transfer pricing and sorting out of where the costs and benefits show up on the balance sheet and income statement. 

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