Which of the following is an advantage of using the negotiated price strategy to determine the transfer price?
ANSWER
INCORRECT
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THE CORRECT ANSWER
It allows division managers to act autonomously.
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YOU WERE SURE AND INCORRECT
It is usually viewed as fair by both parties.
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It can only be used if an outside market exists.
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It can be useful if a market price is not available.
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I DON'T KNOW YET
Allowing division managers to act autonomously is an advantage of using the negotiated price strategy to determine the transfer price.
Usually being viewed as fair by both parties is an advantage of using the market price strategy.
Being useful if a market price is not available is an advantage of using the cost plus a markup strategy.
The abilitiy to only be used if an outside market exists is a disadvantage of using the market price strategy.
The ________ perspective of the balanced scorecard focuses on incorporating innovation, operations, and post-sales support.
ANSWER
correct
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YOU WERE SURE AND CORRECT
internal business
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financial
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customer
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learning and growth
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I DON'T KNOW YET
Which of the following is TRUE about organization-wide performance reports?
ANSWER
correct
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Managers always complete the organization-wide performance report because a manager completely controls the economic conditions surrounding the organization.
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The front-line worker instead of a manager always discovers the root cause of a large variance on an organization-wide performance report.
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Costs incurred by corporate headquarters are treated as a cost center and are typically allocated to any of the divisions.
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YOU WERE SURE AND CORRECT
Operating income from each profit center flows into the performance report for an investment center.
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I DON'T KNOW YET
Capital turnover ________.
ANSWER
correct
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YOU WERE SURE AND CORRECT
focuses on how efficiently the division uses its assets to generate sales revenue
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measures the amount of income an investment center earns relative to the size of its assets
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focuses on profitability by showing how much operating income a division may earn on every $1 of sales revenue
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determines whether the division has created any excess income above and beyond management’s expectations
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I DON'T KNOW YET
Which of the following is a disadvantage of using the negotiated price strategy to determine the transfer price?
ANSWER
correct
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YOU WERE SURE AND CORRECT
It takes time and effort.
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It can be useful if a market price is not available.
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It allows division managers to act autonomously.
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It is usually viewed as fair by both parties.
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I DON'T KNOW YET
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