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

Sprint Company has the following data for 2011: Sprint Company has a target ROI of 20 percent. Required: Calculate the following amounts for each division:

_______________ are NOT controlled by a manager of a profit center.

Which of the following departments would NOT be a cost center?

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

Responsibility accounting is defined as a system that

An example of an investment center is a

Correll Company has two divisions, A and B.Information for each division is as follows: What is the residual income for A?

If the margin of 0.3 stayed the same and the turnover ratio of 5.0 increased by 10 percent, the ROI would

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

Beta Division had the following information: -What is the turnover ratio for Beta Division?

Responsibility accounting is a system that does NOT consider

Hasslehoff Inc., is a multinational company with divisions around the world.Division A in the United States purchases a part from Division G in Canada.There is no outside market for the part.The part is sold for $12 and normally receives a 20% markup on cost. What is the transfer price using the resale price method?

In the Ambros Company, Division A has a product that can be sold either to outside customers or to Division B.Information about these divisions is given below: - The company uses the opportunity cost approach to transfer pricing.What is the minimum transfer price in Case 2?

Which of the following would be a reason why managers would NOT provide good service?

When there is an outside market for an intermediate product that is perfectly competitive, the most equitable method of transfer pricing is

Which of the following is a disadvantage of both residual income and ROI?

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

Beta Division had the following information: What is EVA for Beta Division?

Hasslehoff Inc., is a multinational company with divisions around the world.Division A in the United States purchases a part from Division G in Canada.The part can be purchased externally for $7 each.Transportation costs amount to $1 and the commission of $.50 will not need to be paid. What is the transfer price using the comparable uncontrolled price method?

The Engine Division provides engines for the Tractor Division of a company.The standard unit costs for Engine Division are as follows: What is the best transfer price to avoid transfer price problems?