Exam 22: Management Control Systems, transfer Pricing, and Multinational Considerations

Effort refers to physical exertion,such as a worker producing at a faster rate,but excludes non-physical aspects like acumen and diligence of a worker.

(True/False)

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Question 121

For each of the following statements regarding the satisfaction of transfer pricing criteria,identify whether you would expect the transfer pricing method to meet the criteria.Provide a yes,no,or sometimes for each situation.

(Essay)

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Question 122

Which of the following is not a benefit of decentralization?

(Multiple Choice)

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Question 123

Dual pricing uses two separate transfer-pricing methods to price each transfer from one subunit to another.

(True/False)

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Question 124

What is decentralization and what are its benefits?

(Essay)

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Question 125

Branded Shoe Company manufactures only one type of shoe and has two divisions,the Stitching Division and the Polishing Division.The Stitching Division manufactures shoes for the Polishing Division,which completes the shoes and sells them to retailers.The Stitching Division "sells" shoes to the Polishing Division.The market price for the Polishing Division to purchase a pair of shoes is $50.(Ignore changes in inventory. )The fixed costs for the Stitching Division are assumed to be the same over the range of 40,000-103,000 units.The fixed costs for the Polishing Division are assumed to be $22 per pair at 103,000 units. Calculate and compare the difference in overall corporate net income of Branded Shoe Company between Scenario A and Scenario B if the Assembly Division sells 103,000 pairs of shoes for $120 per pair to customers.

(Multiple Choice)

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Question 126

Briefly describe the conditions that should be met for market-based transfer pricing to lead to optimal decision making among subunits of a large organization.

(Essay)

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Question 127

Dual pricing insulates managers from the realities of the marketplace because costs,not market prices,affect the revenues of the supplying division.

(True/False)

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Question 128

Transfer-pricing systems enable managers to focus on maximizing the performance of their subunits.

(True/False)

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Question 129

For each of the following Balanced Scorecard measures,identify which of the four perspectives (Financial,Customer,Internal Business Process,or Learning and Growth)the measure best represents.

(Essay)

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Question 130

What does Section 482 of the U.S.Internal Revenue Code govern?

(Essay)

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Question 131

What are transfer prices and what are its criteria?

(Essay)

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Question 132

The seller of a product has no idle capacity and can sell all it can produce at $40 per unit.Outlay cost is $19.What is the opportunity cost,assuming the seller sells internally?

(Multiple Choice)

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Question 133

Branded Shoe Company manufactures only one type of shoe and has two divisions,the Stitching Division and the Polishing Division.The Stitching Division manufactures shoes for the Polishing Division,which completes the shoes and sells them to retailers.The Stitching Division "sells" shoes to the Polishing Division.The market price for the Polishing Division to purchase a pair of shoes is $52.(Ignore changes in inventory. )The fixed costs for the Stitching Division are assumed to be the same over the range of 40,000-103,000 units.The fixed costs for the Polishing Division are assumed to be $24 per pair at 103,000 units. What is the transfer price per pair of shoes from the Stitching Division to the Polishing Division if the method used to place a value on each pair of shoes is 175% of variable costs?

(Multiple Choice)

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Question 134

Hybrid transfer prices can be arrived at through negotiations.

(True/False)

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Question 135

What is goal congruence?

(Essay)

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Question 136

Which of the following statements is true of decentralization?

(Multiple Choice)

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Question 137

Surveys indicate that decisions made most frequently at the corporate level are related to sources of supplies and products to manufacture.

(True/False)

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Question 138

Branded Shoe Company manufactures only one type of shoe and has two divisions,the Stitching Division and the Polishing Division.The Stitching Division manufactures shoes for the Polishing Division,which completes the shoes and sells them to retailers.The Stitching Division "sells" shoes to the Polishing Division.The market price for the Polishing Division to purchase a pair of shoes is $46.(Ignore changes in inventory. )The fixed costs for the Stitching Division are assumed to be the same over the range of 40,000-101,000 units.The fixed costs for the Polishing Division are assumed to be $14 per pair at 101,000 units. What is the transfer price per pair of shoes from the Stitching Division to the Polishing Division if the transfer price per pair of shoes is 125% of full costs?

(Multiple Choice)

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Question 139

Effective management control systems should also motivate managers and other employees.

(True/False)

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Question 140

Showing 121 - 140 of 150

Effort refers to physical exertion,such as a worker producing at a faster rate,but excludes non-physical aspects like acumen and diligence of a worker.

For each of the following statements regarding the satisfaction of transfer pricing criteria,identify whether you would expect the transfer pricing method to meet the criteria.Provide a yes,no,or sometimes for each situation.

Which of the following is not a benefit of decentralization?

Dual pricing uses two separate transfer-pricing methods to price each transfer from one subunit to another.

What is decentralization and what are its benefits?

Briefly describe the conditions that should be met for market-based transfer pricing to lead to optimal decision making among subunits of a large organization.

Dual pricing insulates managers from the realities of the marketplace because costs,not market prices,affect the revenues of the supplying division.

Transfer-pricing systems enable managers to focus on maximizing the performance of their subunits.

For each of the following Balanced Scorecard measures,identify which of the four perspectives (Financial,Customer,Internal Business Process,or Learning and Growth)the measure best represents.

What does Section 482 of the U.S.Internal Revenue Code govern?

What are transfer prices and what are its criteria?

The seller of a product has no idle capacity and can sell all it can produce at $40 per unit.Outlay cost is $19.What is the opportunity cost,assuming the seller sells internally?

Hybrid transfer prices can be arrived at through negotiations.

What is goal congruence?

Which of the following statements is true of decentralization?

Surveys indicate that decisions made most frequently at the corporate level are related to sources of supplies and products to manufacture.

Effective management control systems should also motivate managers and other employees.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets,direct-Cost Variances,and Management Control

Flexible Budgets, overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy,balanced Scorecard,and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, rework, and Scrap

Balanced Scorecard: Quality and Time

Inventory Management, just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Performance Measurement, compensation, and Multinational Considerations

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