Exam 10: Decentralization: Responsibility Accounting, Performance Evaluation, and Transfer Pricing

In a multinational firm, it is important to separate the evaluation of a division manager from the __________ .

O'Malley Company requires a return on capital of 15 percent. The following information is available for 2014: Required:

How are accountability, information, and responsibility, related?

Comparison of an international division's ROI can potentially be misleading because of

Which of the following is a political or legal factor affecting performance evaluation in a multinational firm?

The Women's Wear of Bigelow Department Store had a net income of $560,000, a net asset base of $4,000,000, and a required rate of return of 12 percent. Sales for the period totaled $3,000,000. The residual income for the period is

It is important for the multinational firm to separate the evaluation of a division manager from the division.

The following information pertains to the three divisions of Merrymount Company: What are the average operating assets for Division Y?

How do the differences between centralization and decentralization affect decision making? Why would a Company decentralize its operations?

Cornwall Company has two divisions, A and B. Information for each division is as follows: What is the total sales amount for B?

Cornwall Company has two divisions, A and B. Information for each division is as follows: What is EVA for Division B?

Compare and discuss the advantages and disadvantages of the following performance measures: ROI, EVA, and Residual Income.

In centralized organizations, lower-level managers are responsible only for implementing decisions.

Worldwide Inc., is a multinational company with divisions around the world. Division A in the United States purchases a part from Division G in China. There is no outside market for the part because it is used to manufacture another product. The manufacturing cost for the part is $5. Transportation is $1 and commissions are $.5 but do not need to be paid. What is the transfer price using the cost-plus method?

Omega Division had the following information: What is the return on investment of Omega Division?

The Engine Division provides engines for the Final Assembly Division of a company. The standard unit costs for the Engine Division are as follows: What is the transfer price based on variable product costs plus a fixed fee of $210?

What problems do owners face in encouraging goal congruence of managers? What is a stock option? How can stock options encourage goal congruence?

Margin is the ratio of operating income to sales.

The manager of an investment center is responsible for

The Engine Division provides engines for the Tractor Division of a company. The standard unit costs for the Engine Division are as follows: What is the transfer price based on variable product costs plus 20 percent?