Which of the following statement is true about setting a transfer price in a decentralized organization?...
Which of the following statement is true about setting a transfer price in a decentralized organization?
| A cost-based transfer price is the optimal method for establishing a transfer price. |
| A negotiated transfer price is the optimal method for establishing a transfer price. |
| A market-based transfer price is the optimal method for establishing a transfer price. |
| An administered transfer price is the optimal method for establishing a transfer price. |
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Which of the following statement is true about setting a
transfer price in a decentralized organization?...
25. Which of the following is management’s challenge when setting transfer prices? a. Ensuring the buyer has...
25. Which of the following is management’s challenge when setting transfer prices? a. Ensuring the buyer has goal congruence with respect to the organization’s goals. b. Ensuring the seller has goal congruence with respect to the organization’s goals. c. Ensuring either the buyer or the seller, but not both, has goal congruence with respect to the organization’s goals. d. Ensuring both the buyer and seller have goal congruence with respect to the organization’s goals. 26. Which of the following transfer pricing procedures...
Which of the following is NOT a true statement about Price to Earnings ratios? P/E ratios...
Which of the following is NOT a true statement about Price to Earnings ratios? P/E ratios are useful for comparing companies in the same sector. P/E compares a company's market valuation with the income it is actually generating. Stocks with higher forecast earnings growth will usually have a lower P/E. With trailing P/E, the earnings per share is based on the most recent 12 month period. Which of the following is a true statement about using Return on Equity (ROE)...
Which of the following is not a reason for having a decentralized organization? Better information at...
Which of the following is not a reason for having a decentralized organization? Better information at the local level leads to superior decisions. Goal congruence is enhanced. Quicker response to changing economic circumstances. Increased motivation of managers.
Which of the following statement is true about fair value? Select one: a. It is the...
Which of the following statement is true about fair value? Select one: a. It is the amount of revenue recognized using the completed contract method. b. It is the amortized cost of an asset. c. It is the price that would be received in exchange for an item in a transaction between independent parties. d. It is the price that was actually paid when an item was purchased.
Instructions: Choose the best answer (True or False) for record a "T" for True or a...
Instructions: Choose the best answer (True or False) for record a "T" for True or a "F" for False corresponding letters on the line to the lef "A" for True or a "B" for False on the SCANTRON sheet for rows 16 thru 50 21. In incremental analysis, total variable costs will always change under alternative courses of action, and total fixed costs will always remain constant. Decision-making involves choosing among altemative courses of action. 22. 23. A special one-time...
13. For the following questions (13.18) about transfer pricing, assume the organization is X Co. Division...
13. For the following questions (13.18) about transfer pricing, assume the organization is X Co. Division S produces a component that can be sold to outside customers at a fair market price or to Division B at a transfer price. Division B uses the component to produce a finished product itsells to outside customers. Division B can also purchase the component from an outside supplier, Co. O at a fair market price. A transfer pricing system should: a. maximize the...
UESTION 10 Which statement is true about supply? There is an inverse relationship between product price...
UESTION 10 Which statement is true about supply? There is an inverse relationship between product price and quantity supplied There is some price at which quantity supplied of a product is negative As product price decreases, producers are willing to put more of the good on the market for sale To entice producers to offer more of a product on the market for sale, product price must rise
Transfer Pricing: Various Computations Corning Company has a decentralized organization with a divisional structure. Two of...
Transfer Pricing: Various Computations Corning Company has a decentralized organization with a divisional structure. Two of these divisions are the Appliance Division and the Manufactured Housing Division. Each divisional manager is evaluated on the basis of ROI. The Appliance Division produces a small automatic dishwasher that the Manufactured Housing Division can use in one of its models. Appliance can produce up to 30,000 of these dishwashers per year. The variable costs of manufacturing the dishwashers are $100. The Manufactured Housing...
True or False The transfer price should be an amount between the market price and the...
True or False The transfer price should be an amount between the market price and the variable cost.
Identify which of the following statements about cost centers and decentralization is true. Group of answer...
Identify which of the following statements about cost centers and decentralization is true. Group of answer choices Accountability for revenues and expenses exist independently of the ability to make decisions. Decentralized organizations are organized into profit centers. Cost centers are centralized, but profit centers are decentralized. Accountability for revenues and expenses requires the ability to make decisions.
Instructions: Choose the best answer (True or False) for record a "T" for True or a "F" for False corresponding letters on the line to the lef "A" for True or a "B" for False on the SCANTRON sheet for rows 16 thru 50 21. In incremental analysis, total variable costs will always change under alternative courses of action, and total fixed costs will always remain constant. Decision-making involves choosing among altemative courses of action. 22. 23. A special one-time...
13. For the following questions (13.18) about transfer pricing, assume the organization is X Co. Division S produces a component that can be sold to outside customers at a fair market price or to Division B at a transfer price. Division B uses the component to produce a finished product itsells to outside customers. Division B can also purchase the component from an outside supplier, Co. O at a fair market price. A transfer pricing system should: a. maximize the...
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