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

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 the negotiated price is used, Division A's transfer price should be a

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

_______________ is(are) the transfer price that would leave the selling division no worse off if the good is sold to an internal division.

Which of the following departments is likely to be an investment center?

How are information, responsibility, and accountability related?

Correll Company has two divisions, A and B.Information for each division is as follows: - What is the return on investment for A?

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

Provide the missing data in the following situations:

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 maximum transfer price in Case 2?

It is important to separate the evaluation of the manager from the evaluation of the division in a multinational firm.A manager's evaluation should NOT include