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

Young Company has a tax rate of 40 percent.Information for the company is as follows: -What is the weighted cost of capital?

The manager of a cost center is responsible for

_______________ is(are) the transfer price that would leave the buying division no worse off if an input is purchased from an internal division.

Pautner Company had the following historical accounting data per unit: The units are normally transferred internally from Division A to Division B.The units also may be sold externally for $210 per unit.The minimum profit level accepted by the company is a markup of 30 percent.There were no beginning or ending inventories. If variable manufacturing costs without a fixed fee are used as the transfer price, Division A's transfer price would be

Provide the missing data for the following divisions.

Colorado Furniture had the following historical accounting data, per hundred board feet, concerning one of its products: The shelving is normally transferred internally from the Cutting Division to the Finishing Division.It also may be sold externally for $110 per hundred board feet.The minimum profit level accepted by the company is a markup of 20 percent. If the negotiated price is used, Colorado Furniture's transfer price should be a

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

Correll Company has two divisions, A and B.Information for each division is as follows: -What is the operating asset turnover for A?

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

Which of the following changes would increase return on investment (ROI)?

Which of the following is NOT an environmental factor affecting performance evaluation in the multinational firm?

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 a fixed fee of $210?

Division 'A' produces a component and wants to sell it to Division 'B'.The transfer price is

The manager of a profit center is responsible for

Pautner Company had the following historical accounting data per unit: The units are normally transferred internally from Division A to Division B.The units also may be sold externally for $210 per unit.The minimum profit level accepted by the company is a markup of 30 percent.There were no beginning or ending inventories. What would be the transfer price if Division X uses full cost plus markup?

As a managerial reward, _______________ encourage(s) a short-term orientation.

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 full cost plus a markup of 30 percent?

Economic value added is calculated by which of the following formulas?

If the National Division of American Products Company had a turnover ratio of 4.2 and a margin of 0.10, the return on investment would be

Which of the following would NOT be a reason for decentralization?