A sand supplier sells sand to an affiliated entity, a concrete company, in a controlled transaction. The sand supplier evaluates methods for pricing the sand (per ton) by applying various transfer pricing methods.
As noted in the implementation guidance, these case materials can be modified for implementation across a variety of courses and for both undergraduate and graduate students. Classroom validation of the case materials suggests that students generally understood the learning objectives assessed by the case requirements. Student responses from classroom validation varied based on the course and level of the class in which implementation occurred, but student responses were generally consistent with suggested solutions. Students grasped how transfer pricing strategies could function as tax-planning strategies based on the shifting of income across jurisdictions with different corporate tax rates. Specifically, discussion related to the ethicality of income shifting as a tax strategy engaged students and elicited spirited class discussion....
