This study uses an analytical model to investigate the optimal cost-based transfer price for a multinational firm in domestic and foreign markets under the existence of gray market conditions, which occur when there is a parallel importer. In management accounting practice, a parallel importer buys a product sold by a subsidiary of a multinational firm, in order to sell the product in a domestic market. In this case, the choice of multinational transfer price is significant because the level of the transfer price has an impact on domestic market strategies. This paper considers the problem using numerical examples.