Question 1

________ is the desire to attain a selected goal combined with resulting pursuit of that goal.

Accepted Answer

A) Esteem 
B) Ability 
C) Motivation 
D) Determination 
E) Achievements 
A) Esteem 
B) Ability 
C) Motivation 
D) Determination 
E) Achievements

Question 2

Which of the following is not true about cost-based transfer prices?

Accepted Answer

A) Prices are helpful to managers when market prices are unavailable. 
B) Prices are helpful to managers when market prices are inappropriate. 
C) Prices are helpful to managers when the product is specialized. 
D) Prices are helpful to managers when the internal product is similar from the products available externally. 
E) Prices are helpful to managers when the external product is different from the products available externally. 
A) Prices are helpful to managers when market prices are unavailable. 
B) Prices are helpful to managers when market prices are inappropriate. 
C) Prices are helpful to managers when the product is specialized. 
D) Prices are helpful to managers when the internal product is similar from the products available externally. 
E) Prices are helpful to managers when the external product is different from the products available externally.

Question 3

How can managers informally adjust transfer prices to satisfy the tradeoff between tax minimization and incentive provision?

Accepted Answer

The manager can set a high transfer pric

Question 4

What method do most companies use to compute the transfer price?

Accepted Answer

Most companies determine the transfer pr

Question 5

What is the focus of managers in a well-designed transfer-pricing system?

Accepted Answer

The focus of a manager in a we

Question 6

What are the concerns associated with dual-pricing methods?

Accepted Answer

Dual pricing leads to problems and dispu

Question 7

A(n)________ transfer price strongly preserves division autonomy.

Accepted Answer

A) prorated 
B) minimum 
C) maximum 
D) negotiated 
E) incremental 
A) prorated 
B) minimum 
C) maximum 
D) negotiated 
E) incremental

Question 8

Temporary drops in market prices below historical averages when an industry has excess capacity are:

Accepted Answer

A) market prices. 
B) distress prices. 
C) dangling prices. 
D) installed prices. 
E) maximum prices. 
A) market prices. 
B) distress prices. 
C) dangling prices. 
D) installed prices. 
E) maximum prices.

Question 9

Which of the following is not true about transfer prices?

Accepted Answer

A) Creates costs for the selling subunit. 
B) Creates revenue for the selling subunit. 
C) Affects each subunit's operating income. 
D) Operating incomes used to evaluate subunits' performance. 
E) Operating incomes are not used to motivate managers. 
A) Creates costs for the selling subunit. 
B) Creates revenue for the selling subunit. 
C) Affects each subunit's operating income. 
D) Operating incomes used to evaluate subunits' performance. 
E) Operating incomes are not used to motivate managers.

Question 10

The managerial accountant at the Snowboard Factory reported that the company makes internal transfers at 150% of full cost.The Wood Refining Division purchases 35,000 slabs of wood per day,on average,from a local supplier,who delivers wood for $50 per slab via an external shipper.To reduce costs,the company located an independent supplier in Utah who is willing to sell 35,000 slabs of wood at a variable cost of $4.25 per slab.
Required
Compute the full cost of purchasing the wood from the Utah supplier and shipping it to the Wood Refining Division.

Accepted Answer

A) $1,525,000 
B) $1,600,350 
C) $1,625,950 
D) $1,898,750 
E) $1,925,460 
A) $1,525,000 
B) $1,600,350 
C) $1,625,950 
D) $1,898,750 
E) $1,925,460

Question 11

The manager is accountable for revenues and costs in which of the following responsibility centers?

Accepted Answer

A) Cost Center. 
B) Clinic Center. 
C) Profit Center. 
D) Revenue Center. 
E) Investment Center. 
A) Cost Center. 
B) Clinic Center. 
C) Profit Center. 
D) Revenue Center. 
E) Investment Center.

Question 12

The new and innovative product X at Hyper Solutions has no idle capacity and the manager can sell and produce it at $75 per unit,with a cost of $12.Compute the opportunity cost,assuming the seller sells the product internally.

Accepted Answer

A) $0.20 
B) $6.25 
C) $63 
D) $87 
E) $97 
A) $0.20 
B) $6.25 
C) $63 
D) $87 
E) $97

Question 13

Effective management control systems should also motivate managers and other employees.

Accepted Answer

A) True 
 B)False

________ is the desire to attain a selected goal combined with resulting pursuit of that goal.

Which of the following is not true about cost-based transfer prices?

How can managers informally adjust transfer prices to satisfy the tradeoff between tax minimization and incentive provision?

What method do most companies use to compute the transfer price?

What is the focus of managers in a well-designed transfer-pricing system?

What are the concerns associated with dual-pricing methods?

A(n)________ transfer price strongly preserves division autonomy.

Temporary drops in market prices below historical averages when an industry has excess capacity are:

Which of the following is not true about transfer prices?

The manager is accountable for revenues and costs in which of the following responsibility centers?

The new and innovative product X at Hyper Solutions has no idle capacity and the manager can sell and produce it at $75 per unit,with a cost of $12.Compute the opportunity cost,assuming the seller sells the product internally.

Effective management control systems should also motivate managers and other employees.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Process Costing and Cost Allocation

Activity-Based Costing and Activity-Based Management

Pricing Decisions, customer Profitability, and Cost Management

Determining How Costs Behave

Decision Making and Relevant Information

Quality, inventory Management, and Time

Capital Investments

Master Budget and Responsibility Accounting

Flexible Budgets, cost Variances, and Management Control

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Performance Measurement and Compensation

Filters

Exam 15: Transfer Pricing

________ is the desire to attain a selected goal combined with resulting pursuit of that goal.

Which of the following is not true about cost-based transfer prices?

How can managers informally adjust transfer prices to satisfy the tradeoff between tax minimization and incentive provision?

What method do most companies use to compute the transfer price?

What is the focus of managers in a well-designed transfer-pricing system?

What are the concerns associated with dual-pricing methods?

A(n)________ transfer price strongly preserves division autonomy.

Temporary drops in market prices below historical averages when an industry has excess capacity are:

Which of the following is not true about transfer prices?

The manager is accountable for revenues and costs in which of the following responsibility centers?

The new and innovative product X at Hyper Solutions has no idle capacity and the manager can sell and produce it at $75 per unit,with a cost of $12.Compute the opportunity cost,assuming the seller sells the product internally.

Effective management control systems should also motivate managers and other employees.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Process Costing and Cost Allocation

Activity-Based Costing and Activity-Based Management

Pricing Decisions, customer Profitability, and Cost Management

Determining How Costs Behave

Decision Making and Relevant Information

Quality, inventory Management, and Time

Capital Investments

Master Budget and Responsibility Accounting

Flexible Budgets, cost Variances, and Management Control

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Performance Measurement and Compensation

Filters