This video discusses the use of market-based transfer prices.
A market-based transfer price is based on the fair market value of the good being transferred from the selling division to the buying division. When the selling division does not have excess (idle) capacity, the market price most closely approximates the opportunity cost of the resource. However, in some cases the market price may be difficult to determine. For example, if there is no external market for the intermediate product, there may be no way reliable way to determine what the fair market value of the intermediate product is.