Special economic zones are customs-privileged facilities that ...

[danielfitts88]

Special economic zones are customs-privileged facilities that typically exist in countries with low-cost labor.
 
 Indicate whether the statement is true or false

Question 2

Cost-based transfer pricing sets the price based on the cost incurred by the company to make the product.
 
 Indicate whether the statement is true or false

[at]

Answer to Question 1

T
Special economic zones are customs-privileged facilities that typically exist in countries with low-cost labor. Under most arrangements, products are brought into an in-bond area, manipulated, and then reexported to the country where the products originated. Maquiladoras in Mexico are an example.

Answer to Question 2

F
Cost-based transfer pricing does not set the price based on cost incurred by the company, but rather by the estimated opportunity cost of the product.

[danielfitts88]

Thanks for the timely response, appreciate it

[gcook]

Gracias!