Using Transfer Pricing Definitions

This section provides an overview of transfer pricing definitions and discusses how to:

Use the Transfer Pricing Definition page.
Copy transfer pricing defaults between business units.
Use the Additional Transfer Price page at the header level.
Use the Additional Transfer Price page at the detail level.
Review examples of transfer pricing.

Pages Used to Define Transfer Prices

Page Name	Definition Name	Navigation	Usage
Transfer Pricing Definition	CM_TRAN_PRICE_DEFN	select Cost Accounting, then select Item Costs, then select Define Rates and Costs, then select Transfer Pricing Definition	Define the transfer prices, markup percentages, and additional transfer costs to be used for a source business unit or a source and destination unit pair.
Copy Pricing Definition	CM_TRAN_PRC_COPY	Click the Copy Pricing Definition link on the Transfer Pricing Definition page.	Enter a source inventory business unit and a destination business unit (optional) to copy an existing transfer pricing definition to another inventory business unit.
Additional Transfer Price (Header Level)	CM_TRAN_PRICE_CE	On the Transfer Pricing Definition page, click the Additional Costs link in the BU Level Defaults group box.	Add or change additional costs at the header level of the transfer pricing definition.
Additional Transfer Price (Detail Level)	CM_TRAN_PRICE_CEDT	On the Transfer Pricing Definition page, click the Addl Costs icon in the Item / Item Group Definitions group box.	Add or change additional costs to a item group or item ID (detail level).

Understanding Transfer Pricing Definitions

To define transfer prices, use the Transfer Pricing Definition component (CM_TRAN_PRICE_DEFN). Use the Transfer Pricing Definition component interface (CM_TRAN_PRICE_CI) to load data into the tables for this component.

The key to establishing your transfer price is the Transfer Pricing Definition component, where you can establish transfer prices by:

Inventory Business Unit Pairs: A combination of the source business unit, destination business unit, and pricing effective date.
Source Business Unit Only: A combination of the source business unit and pricing effective date. By leaving the destination business unit blank, you can create transfer prices for all items in the source unit that transfer to any destination business unit that is not already defined in a business unit pair.

The Transfer Pricing Definition component defines the transfer prices for all items within a source business unit or an inventory business unit pair. When a transfer pricing definition has not been setup for certain business units, the system transfers the items at the cost in the source inventory business unit. When a transfer pricing definition is created, setting all transfer prices at the business unit level (header level) may be too broad; therefore, the Transfer Pricing Definition component allow you to override the header level settings with transfer prices specific to the item group or item ID itself. The specific information is used instead of the more general information.

Once you define your transfer pricing definitions, you can:

Populate the Transfer Pricing table with your transfer prices and additional transfer costs by running the Calculate Transfer Price process. The Deplete On Hand Qty process looks to this table first to find a match and to retrieve transfer data.
Leave the Transfer Pricing table blank for some or all items. If the Deplete On Hand Qty process cannot find a match in the Transfer Pricing table, then it looks to the setup in the Transfer Pricing Definition components. The detail level overrides are used instead of the header level information. Header level information is used when no detail level overrides exist and the Price Overrides Only check box is not selected.

The Transfer Pricing Definition component can be used by both:

The Calculate Transfer Price process to populate the Transfer Price table.
The Deplete On Hand Qty process to calculate a transfer price for an MSR line directly using the data in the Transfer Pricing Definition component. Use this option if the Transfer Price table does not contain a transfer price for the MSR line.

Not all options on the Transfer Pricing Definition component are available when the Deplete On Hand Qty process is calculating a transfer price directly from the component. Look carefully at the field definitions for information about the Calculate Transfer Price process and the Deplete On Hand Qty process.

Note: PeopleSoft Cost Management does not support interunit pricing for non-cost items.

For additional details about applying transfer prices to an MSR, see the Understanding Interunit Transfers topic.

Transfer Pricing Definition Page

Use the Transfer Pricing Definition page (CM_TRAN_PRICE_DEFN) to define the transfer prices, markup percentages, and additional transfer costs to be used for a source business unit or a source and destination unit pair.

Navigation

select Cost Accounting, then select Item Costs, then select Define Rates and Costs, then select Transfer Pricing Definition

Image: Transfer Pricing Definition page

This example illustrates the fields and controls on the Transfer Pricing Definition page. You can find definitions for the fields and controls later on this page.

New Transfer Pricing Definitions

In add mode, you enter the source inventory business unit in the Business Unit field and the destination inventory business units in the Destination Unit field. The Pricing Effective Date field defaults to today's date if there is no entry. The Destination Unit field is not required. If you leave the Destination Unit field blank, then the parameters set up on this component apply to the source business unit, regardless of the inventory business unit receiving the stock. The transfer pricing definition with the source business unit and no destination unit is used as the default for all business unit pairs that are not defined. The source business unit must be valid and an open inventory unit.

Copy Pricing Definition

Click this link to access the Copy Pricing Definition page, where you can copy an existing transfer pricing definition to this source inventory business unit, destination unit, and price effective date combination. This link is only available if you creating a new transfer pricing definition by entering this page in the add mode.

Header Levels and Detail Levels

On the Transfer Pricing Definition page, overrides and default values can be entered at both the header level or the detail level.

Overrides and default values defined at the header level apply to the entire transfer pricing definition. The header level includes the Default Overrides group box and the BU Level Defaults group box. These values are used with transfers from this source inventory business unit (or source unit and destination unit combination) and for this price effective date. Information added at the header level is used to determine the transfer price for all items that are not overridden at the detail level as long as the Price Overrides Only check box has not been selected.

Overrides and default values defined at the detail level apply to an item group or item ID within the transfer pricing definition. The detail level includes the Item / Item Group Definitions group box. These values can be added to override the values defined at the header level.

Price Overrides Only

Select this check box to have the system use only the data in the Item / Item Group Definitions group box. The overrides and default values defined at the header level are not used unless the detail level selects the default option for a specific item ID or item group.

Default Overrides Group Box

The values defined in this group box apply to the header level of this transfer pricing definition. The following zero check boxes prevent the system from performing a particular calculation. These check boxes are not mutually exclusive with their associated value. For example, both a Zero Markup Percent can be entered and the Zero Markup Percent flag checked, though once the Transfer at Zero Price field is selected, selecting the Zero Markup Percent has no additional effect. These check boxes control what is done for any items not overridden at the detail level. Keep in mind that these check boxes are never used for items defined in the detail level of this component. In addition, if the Price Overrides Only check box is selected, then this group box is not used.

Transfer at Zero Price

Select this check box if all items in this transfer pricing definition are to be transferred at no cost; unless overridden at the detail level. If you select this check box, the transfer price row (in IN_DEMAND_TPRC) for each transferred item is created using the item's default cost element with a cost of 0.00.

Zero Markup

Select this check box if all items in this transfer pricing definition are to be transferred at with no markup percentage; unless overridden at the detail level.

Zero Additional Costs

Select this check box if all items in this transfer pricing definition are to be transferred at with no additional transfer costs added to the base transfer price; unless overridden at the detail level.

The check boxes in this group box are used by both:

The Calculate Transfer Price process to populate the Transfer Price table (CM_TRAN_PRICE).
The Deplete On Hand Qty process to calculate a transfer price for an MSR line using the data in the Transfer Pricing Definition component. This option is used if the Transfer Price table does not contain a transfer price for the MSR line.

BU Level Defaults Group Box

The default values defined in this group box apply to the entire transfer pricing definition (that is, the header level). These default values are used with transfers from this source inventory business unit (or source unit and destination unit combination) and for this price effective date. When setting up a Transfer Pricing Definition component, keep in mind that your entry in the Price Overrides Only check box changes the use of this group box.

Actual Cost

Select the method for calculating the transfer price for items using the actual cost method on the Cost Profiles page. If this field is left blank, then the system uses the Default Actual Cost value. The options are:

Average Day's Receipts: The transfer price is base on a weighted average of receipt costs over the past number of days. Enter the number of days in the Number of Days field in this group box. The Number of Days field is required when this option is selected. The system retrieves the receipts for a date range from the current date back the specified number of days and then the system calculates a weighted average as follows: sum of quantity received times receipt cost divided by total quantity received. This option can only be used by the Calculate Transfer Price process to populate the Transfer Price table.
Default Actual Cost: The transfer price is based on the value in the Default Actual Cost field (DFLT_ACTUAL_COST) on the Define Business Unit Item - General: Common page (BU_ITEMS_INV table). This option is the default value when creating a new transfer pricing definition. If the Deplete On Hand Qty process is calculating a transfer price for an MSR line by directly using the data in the Transfer Pricing Definition component, then this option is the only available choice.
Last Actual Cost: The transfer price is based on the last receipt cost in CM_ACTUAL_COST table. This option can only be used by the Calculate Transfer Price process to populate the Transfer Price table.

PeopleSoft Cost Management does not support interunit pricing for non-cost items.

Average Cost

Select the method for calculating the transfer price for items using an average cost methods on the Cost Profiles page. If this field is left blank, then the system uses the Average Purchase Price value. The options are:

Average Day's Receipts: The transfer price is based on a weighted average of receipt costs over the past number of days. Enter the number of days in the Number of Days field in this group box. The Number of Days field is required when this option is selected. The system retrieves the receipts for a date range from the current date back the specified number of days and then the system calculates a weighted average as follows: sum of quantity received times receipt cost divided by total quantity received. If no receipts are found for the specified date range, then the system uses the cost in the Average Purchase Price field (AVERAGE_COST) in the Define Business Unit Item - General: Common page (BU_ITEMS_INV table). This option can only be used by the Calculate Transfer Price process to populate the Transfer Price table.
Average Purchase Price: The transfer price used is based on the item's deplete cost method as follows:
- For items with a cost profile using a deplete cost method of Periodic Weighted Average or Retroactive Weighted Average, the system uses the value in the Average Purchase Price field (AVERAGE_COST) in the Define Business Unit Item - General: Common page (BU_ITEMS_INV table).
- For items with a cost profile using a deplete cost method of Perpetual Weighted Average, the system uses the current perpetual average cost located in the CM_PERPCUR_VW table.

This option is the default value when creating a new transfer pricing definition. If the Deplete On Hand Qty process is calculating a transfer price for an MSR line by directly using the data in the Transfer Pricing Definition component, then this option is the only available choice.

PeopleSoft Cost Management does not support interunit pricing for non-cost items.

Number of Days

Enter the past number of days' worth of receipts to be used to calculate the weight average for the transfer price. This field is required when the Average Day's Receipts value is selected for the Actual Cost field or the Average Cost field.

Price Markup % (price markup percentage)

Define the percentage increase to the initial transfer price of the item. The markup percentage is applied to all cost elements. For example, if you enter a value of 25 in this field and the item includes 75 USD in the cost element 100 (material) and 25 USD in the cost element 601 (landed costs), then the markup is applied to 100 USD for a total markup of 25 USD (100 USD × 25% = 25 USD). The markup amount can be applied to the material cost element or to an additional transfer cost element, depending on your entry in the next field (the Cost Element Option field).

Be sure to enter a 25% markup as 25, not .25. In addition, you can enter a percentage greater than 100.

For the source inventory business unit, a gain is recorded for the difference between the marked up transfer price and the cost of the item. The destination business unit can include the markup in the cost of the item or expense it to another account.

This field is used by both the Calculate Transfer Price process (to populate the Transfer Price table) and the Deplete On Hand Qty process (to calculate a transfer price directly from this component).

Cost Element Option

Select the type of cost element to which the markup percentage should be applied. This is the Cost Category defined for the cost element. The options are:

Material: The system adds the price markup to the material cost element of the transferred item. If you select this option, you cannot enter a value in the Markup Cost Element field on this page since the system uses the item's material cost element located in the Default Cost Element field on the Define Business Unit Item - General: Common page.
Addl Cost:The system adds the price markup to the additional transfer costs cost element of the transferred item. If you select this option, you must enter a value in the Markup Cost Element field.

Markup Cost Element

If you have entered the value of Addl Cost in the Cost Element Option field, enter a cost element with the cost category of Addl Trans (Additional Transfer Costs). When the price markup is calculated, it is applied to this cost element. If this field is blank, then the system retrieves the material cost element for the item from the Default Cost Element field defined on the Define Business Unit Item - General: Common page.

Additional Costs

Click the Additional Costs link (in the BU Level Defaults group box) to access the Additional Transfer Price (Header Level) page, where you can define or change additional transfer costs at the header level of this transfer pricing definition. These costs use a cost element with the cost category of Addl Trans (Additional Transfer Costs). This link and the underlying Additional Transfer Price (Header Level) page can only be used by the Calculate Transfer Price process to populate the Transfer Price table.

Select Lines Group Box

Use the Select Lines group box to enter search criteria for displaying existing items and item group definition in the Item / Item Group Definitions group box.

Select Lines By

Select to search for rows by Item Group, Item ID, or All.

Item / Group

Enter the item ID or item group ID to be used when selecting data for the Item / Item Group Definitions group box. The search returns rows with a value equal to or greater than the item ID or item group defined. If this field is left blank, the search returns both item IDs and item groups.

Number of Lines

Enter the number of rows to be displayed in the Item / Item Group Definitions group box. If this field is blank, then the search uses a default of 100 rows. This field is populated by a default value from the Transfer Price Lines Displayed field on the Installation Options - Inventory page.

Select Lines

Click this button to search for rows previously created for items and item groups in the Item / Item Group Definition group box. The rows that appear are limited by your search criteria (Select Lines By field, Item / Group field, and Number of Lines field). To display other rows, change your search criteria and then click this button to initiate a new search; a warning message is displayed asking if you want to save changes to the existing date.

Item / Item Group Definitions Group Box

The detail level overrides and default values defined in this group box apply to the specific item ID or item group in the row. The values entered here override the same values entered at the header level. To create a new row to override header level attributes for a specific item ID or item group, add a new row to the grid.

Select Type

When adding a new row, select to add an Item or Group to specify what type of value will be entered in the Item ID / Item Group field.

Item ID / Item Group

Enter either an item ID or an item group depending on your entry in the Select Type field. An row in this grid overrides the header level parameters used to calculate the transfer price. If a destination business unit has been specified, the item ID must be valid in both business units.

Description

Displays the description of the item ID or item group.

Price Override Action

Enter a value to determine the origin of the transfer price. The options are:

Default: Use the pricing method specified at the header level of the transfer pricing definition.
Specify: Use the transfer price entered in the Transfer Price field on this row.

Transfer Price

Enter a transfer price to override the calculation at the header level of this transfer pricing definition. To use this field, you must select the value of Specify for the Price Override Action field in this row. If the field is blank, then the system uses a zero price for the transfer.

Markup Override Action

Enter a value to determine the origin of the markup percentage applied to the transfer price. The options are:

Default: Use the markup percentage specified at the header level of the transfer pricing definition.
Specify: Use the percentage entered in the Price Markup % field on this row.

Price Markup %

Enter a markup percentage to be applied to the transfer price. This field overrides the markup percentage at the header level of this transfer pricing definition. To use this field, you must select the value of Specify for the Markup Override Action field in this row. If the field is blank, then the system does not use a markup percentage on the transfer price.

Cost Element Override Action

Select the type of cost element to which the markup percentage should be applied. The options are:

Material: The system adds the price markup to the material cost element of the transferred item. If you select this option, you cannot enter a value in the Cost Element field of this row since the system uses the item's material cost element. The system retrieves the material cost element for the item from the Default Cost Element field defined on the Define Business Unit Item - General: Common page.
Default: The system uses the values in the Markup Cost Element group box at the header level of this transfer pricing definition.
Specify:The system uses the override value in the Cost Element field in this row. This cost element must have a cost category of Addl Trans (additional transfer costs).

Cost Element

Enter a cost element with a cost category of Addl Trans (additional transfer costs). The markup percentage is applied to this cost element if you have selected the value of Specify for the Cost Element Override Action field on this row.

Add'l Cost Override Action (additional cost override action)

Enter a value to determine the origin of the Addl Trans cost elements applied to the transfer price. The options are:

Default: Use the Addl Trans cost elements specified in the Additional Transfer Price (Header Level) page of this transfer pricing definition. To access this page, click the Additional Costs link within the BU Level Defaults group box.
Specify: Use the Addl Trans cost elements entered in the Additional Transfer Price (Detail Level) page of this row. To access this page, click the Addl Costs icon on this row.

This field can only be used by the Calculate Transfer Price process to populate the Transfer Price table.

(Addl Costs)

Click the Additional Costs icon to access the Additional Transfer Price (Detail Level) page, where you can add or change additional costs to a item group or item ID (detail level). This link and the underlying Additional Transfer Price (Detail Level) page can only be used by the Calculate Transfer Price process to populate the Transfer Price table.

Copy Pricing Definition Page

Use the Copy Pricing Definition page (CM_TRAN_PRC_COPY) to enter a source inventory business unit and a destination business unit (optional) to copy an existing transfer pricing definition to another inventory business unit.

Navigation

Click the Copy Pricing Definition link on the Transfer Pricing Definition page.

Image: Copy Pricing Definition page

This example illustrates the fields and controls on the Copy Pricing Definition page. You can find definitions for the fields and controls later on this page.

When setting up the transfer pricing definitions for each of your source unit, destination unit, and price effective date combinations, you can reduce data entry time by using the copy feature on the Copy Pricing Definition page. Enter a source inventory business unit and a destination business unit (optional) Use this page to copy an existing transfer pricing definition to your new combination of source business unit, destination unit, and price effective date. This page is only available if you are adding a new transfer pricing definitions.

Business Unit

Enter the source business unit for an existing transfer pricing definition that you wish to copy. The default value for this field is the source business unit defined on the new Transfer Pricing Definition page.

Destination Unit

(Optional) Enter the destination business unit for an existing transfer pricing definition that you want to copy. The default value for this field is the destination unit defined on the new Transfer Pricing Definition page.

Price Effective Date

Enter the effective date for the existing transfer pricing definition that you want to copy. The Look Up icon displays existing price effective dates based your entries in the Business Unit and Destination Unit fields.

Copy Detail

Select this check box to copy the item and item group overrides (the Item / Item Group Definitions group box) from the existing transfer pricing definition to your new definition. The Additional Transfer Price (Detail Level) page is also copied.

Note: In order to copy item and item group details, the business units must share the same available items. Item groups are not edited.

The copy action immediately saves the new data and overrides any existing information that you may have entered on the new transfer pricing definition.

Additional Transfer Price (Header Level) Page

Use the Additional Transfer Price (Header Level) page (CM_TRAN_PRICE_CE) to add or change additional costs at the header level of the transfer pricing definition.

Navigation

On the Transfer Pricing Definition page, click the Additional Costs link in the BU Level Defaults group box.

Image: Additional Transfer Price page at the header level

This example illustrates the fields and controls on the Additional Transfer Price page at the header level. You can find definitions for the fields and controls later on this page.

This page displays the cost element detail for the header level of the transfer pricing definition and allows you to enter additional transfer costs using cost elements with a cost category of Addl Trans. This page can only be used by the Calculate Transfer Price process to populate the Transfer Price table.

Cost Element Option

Select the cost category of the cost element for this row. The options are Material or Add'l Cost. If you select the Material option, the Cost Element field must remain blank.

Cost Element

Select a Addl Trans cost element for this row. The cost element does not have to be unique.

If the cost element field is blank, then the system retrieves the material cost element for the item from the Default Cost Element field defined on the Define Business Unit Item - General: Common page.

Description

Displays the description of the cost element.

Comment

(Optional) Enter a comment about this additional charge.

Additional Fee

Enter a amount to be applied to transfers using the cost element specified on this row.

Markup %(markup percentage)

Define the percentage increase to the initial transfer price of the item. The markup percentage is applied to all cost elements. For example if you enter a value of 25 in this field and the item includes 75 USD in the cost element 100 (material) and 25 USD in the cost element 601 (landed costs) then the markup is applied to 100 USD for a total markup of 25 USD (100 USD x 25%= 25 USD). The markup amount can be applied to the material cost element or to an additional transfer cost element depending on your entry in the Cost Element Option field of this row.

Be sure to enter a 25% markup as 25, not .25. In addition, you can enter a percentage greater than 100.

Additional Transfer Price (Detail Level) Page

Use the Additional Transfer Price (Detail Level) page (CM_TRAN_PRICE_CEDT) to add or change additional costs to a item group or item ID (detail level).

Navigation

On the Transfer Pricing Definition page, click the Addl Costs icon in the Item / Item Group Definitions group box.

Image: Additional Transfer Price page at the detail level

This example illustrates the fields and controls on the Additional Transfer Price page at the detail level. You can find definitions for the fields and controls later on this page.

This page displays the cost element detail for the detail level of the transfer pricing definition and allows you to enter additional transfer costs using cost elements with a cost category of Addl Trans. The top section of this page displays the item ID or item group for these additional prices. The field definitions are the same as the Additional Transfer Price (Header Level) page defined above. This page can only be used by the Calculate Transfer Price process to populate the Transfer Price table.

Reviewing Examples of Transfer Pricing

The following examples show how the transfer price default hierarchy uses the Transfer Pricing Definition component. In the examples below, the fields used on the Transfer Pricing Definition component can be used by the Calculate Transfer Price process to build the Transfer Pricing table and by the Deplete On Hand Qty process to directly calculate the MSR line transfer price.

Transfer Pricing Definition 1: Source business unit: US001, Destination business unit: (blank), and Price Effective Date: 10/15/2009

Header Level:

Price Overrides Only check box

Price Markup %

Cost Element Option

Markup Cost Element

Not selected

20%

Add'l Cost

751
Detail Level:

Item ID

Transfer Price

Price Markup %

Cost Element

80200

Specify: 4.00

Specify: 4%

Specify: 750

Price Overrides Only check box	Price Markup %	Cost Element Option	Markup Cost Element
Not selected	20%	Add'l Cost	751

Item ID	Transfer Price	Price Markup %	Cost Element
80200	Specify: 4.00	Specify: 4%	Specify: 750

Transfer Pricing Definition 2: Source business unit: US001, Destination business unit: US014, and Price Effective Date: 10/15/2009

Header Level:

Price Overrides Only check box

Price Markup %

Cost Element Option

Markup Cost Element

Not selected

15%

Add'l Cost

750

Price Overrides Only check box	Price Markup %	Cost Element Option	Markup Cost Element
Not selected	15%	Add'l Cost	750

Detail Level:

Item ID	Transfer Price	Price Markup %	Cost Element
80400	Specify: 18.18	Specify: 10%	Default
80500	Specify: 7.00	Specify: 5%	Specify: 751

The following item and cost information are used in these examples:

Item ID	Cost Method	Cost Element	Cost
80100	Perpetual Average	Material: 100	11.00 (current perpetual average)
80200	Perpetual Average	Material: 100	10.00 (current perpetual average)
		Landed Cost- Duty: 601	1.00
80300	Actual	Material: 100	10.10 (default actual cost)
80400	Perpetual Average	Material: 100	10.00 (current perpetual average)
		Landed Cost- Duty: 601	1.00
80500	Perpetual Average	Material: 100	5.00 (current perpetual average)
		Landed Cost- Duty: 601	.25
80600	Standard cost	Material: 100	10.00 (current standard)

Example 1

In this example, the following results will occur (for the US001/US014 combination only) when the Calculate Transfer Price process populates the Transfer Pricing table or when the Deplete On Hand Qty process calculates the transfer prices directly for MSR lines. In both cases, to populate transfer prices and cost elements for the source business unit US001 and the destination business unit US014, the processes (using the transfer price default hierarchy) look first to the transfer pricing definition 2; if data cannot be found then the processes look to the transfer pricing definition 1.

Item ID	Cost Element	Transfer Price	Comments
80100	100	11.00	On the transfer pricing definition 2 no detail information for this item is found, so the header information is used. A 15% markup is applied to the current perpetual average cost and added to the 750 cost element.
	750	1.65
80200	100	10.00	On the transfer pricing definition 2 no detail information for this item is found, so the header information is used. A 15% markup is applied to the current perpetual average cost and added to the 750 cost element. In addition, the landed costs in the cost element 601 is added to the transfer price.
	601	1.00
	750	1.50
80300	100	10.10	On the transfer pricing definition 2 no detail information for this item is found, so the header information is used. A 15% markup is applied to the default actual cost and added to the 750 cost element.
	750	1.515
80400	100	18.18	Detail information for this item is found on the transfer pricing definition 2. A transfer price of 18.18 is applied to the material cost element and a 10% markup of the transfer price is applied to the 750 cost element.
	750	1.81
80500	100	7.00	Detail information for this item is found on the transfer pricing definition 2. A transfer price of 7.00 is applied to the material cost element and a 5% markup of the transfer price is applied to the 751 cost element.
	751	.35
80600	100	10.00	On the transfer pricing definition 2 no detail information for this item is found, so the header information is used. A 15% markup is applied to the current frozen standard cost and added to the 750 cost element.
	750	1.50

Example 2

In this example, all information is the same as example 1 except the Price Overrides Only check box is selected on the transfer pricing definition 2. The following results will occur (for the US001/US014 combination only) when the Calculate Transfer Price process populates the Transfer Pricing table or when the Deplete On Hand Qty process calculates the transfer prices directly for MSR lines. Since the transfer pricing definition 2 is more specific, the processes (using the transfer price default hierarchy) look first to it. If data cannot be found then the processes look to the transfer pricing definition 1.

Item ID	Cost Element	Transfer Price	Comments
80100	100	11.00	No detail information for this item is found on the transfer pricing definition 2, so the header information is used from the transfer pricing definition 1. A 20% markup is applied to the current perpetual average cost and added to the 751 cost element.
	751	2.20
80200	100	4.00	No detail information for this item is found on the transfer pricing definition 2, so the detail information is used from the transfer pricing definition 1. A transfer price of 4.00 is applied to the material cost element and a 4% markup of the transfer price is applied to the 750 cost element.
	750	.16
80300	100	10.10	No detail information for this item is found on the transfer pricing definition 2, so the header information is used from the transfer pricing definition 1. A 20% markup is applied to the default actual cost and added to the 751 cost element.
	751	2.02
80400	100	18.18	Detail information for this item is found on the transfer pricing definition 2. A transfer price of 18.18 is applied to the material cost element and a 10% markup of the transfer price is applied to the 750 cost element. Note that the detail level of the transfer pricing definition 2 instructs the system to use the header level default for the cost element even though the Price Overrides Only check box has been selected.
	750	1.81
80500	100	7.00	Detail information for this item is found on the transfer pricing definition 2. A transfer price of 7.00 is applied to the material cost element and a 5% markup of the transfer price is applied to the 751 cost element.
	751	.35
80600	100	10.00	No detail information for this item is found on the transfer pricing definition 2, so the header information is used from the transfer pricing definition 1. A 20% markup is applied to the current frozen standard cost and added to the 751 cost element.
	751	2.00