What is transfer price in SAP CO-PC - Product Cost Controlling?

SAP Term: transfer price

• Component: CO-PC

• Component Name: Product Cost Controlling

• Description: The price charged for transfer of a product from one business unit company code or profit center to another.

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• Key Concepts: 
  Transfer price is a term used in SAP's CO-PC Product Cost Controlling component. It is the price at which goods and services are exchanged between two related companies within the same corporate group. This price is used to calculate the cost of goods sold and the cost of inventory. 
  
  How to use it: 
  Transfer prices are used to calculate the cost of goods sold and the cost of inventory. The transfer price is determined by taking into account the costs associated with producing, transporting, and selling the goods or services. The transfer price can also be used to determine the profitability of a product or service. 
  
  Tips & Tricks: 
  When setting a transfer price, it is important to consider all costs associated with producing, transporting, and selling the goods or services. Additionally, it is important to consider market conditions and competitive pricing when setting a transfer price. 
  
  Related Information: 
  Transfer prices are also used in other SAP components such as Materials Management (MM) and Sales and Distribution (SD). Additionally, transfer pricing can be used to determine the profitability of a product or service.