Recent Question

Market-based transfer prices are ideal in perfectly competitive TRUE/FALSE 1. The prices negotiated by two divisions of the same company usually have no specific relationship to either costs or market price. 2. Opportunity costs represent the cash flows directly associated with the production and transfer of the products and services. 3. Market-based transfer prices are ideal in perfectly competitive markets when there is i ...

Other / Other 08 Apr 2016

Prepare Sally's statement of cash flows Ex. 1 The following information is available for Sally Corporation for the year ended December 31, 2014: Collection of principal on long-term loan to a supplier $15,000 Acquisition of equipment for cash 10,000 Proceeds from the sale of long-term investment at book value 20,000 Issuance of common stock for cash 27,000 Depreciation expense 28,000 Redemption of bonds payable at carrying ...

Other / Other 08 Apr 2016

An advantage of using budgeted costs for transfer pricing 1. Cost-based transfer prices are helpful a. when a market exists for the product. b. when a price is easy to obtain. c. when the product is unique. d. for all of the above. 2. When companies do not want to use market prices or find it too costly, they typically use _______________prices, even though suboptimal decisions may occur. a. average-cost b. full-cost ...

Other / Other 08 Apr 2016

What is the term used to describe the situation when a manager's decision 1. A disadvantage of decentralization is that it a. creates greater responsiveness to local needs. b. focuses manager's attention on the organization as a whole. c. does not result in a duplication of activities. d. encourages suboptimal decision making. 2. All of the following are benefits of decentralization EXCEPT that a. it creates greater re ...

Other / Other 08 Apr 2016

Calculate and compare the difference in overall corporate THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 1 THROUGH 6. Calculate the Division operating income for the BetaShoe Company which manufacturers only one type of shoe and has two divisions, the Sole Division, and the Assembly Division. The Sole Division manufactures soles for the Assembly Division, which completes the shoe and sells it to retailers. The Sole Division "sells" soles ...

Other / Other 08 Apr 2016

Prepare a statement of cash flows for Lowz Company aEx. 1 The income statement of Frank Company is shown below: FRANK COMPANY Income Statement For the Year Ended December 31, 2014 Sales $8,400,000 Cost of goods sold 5,400,000 Gross profit 3,000,000 Operating expenses Selling expenses $500,000 Administrative expense 700,000 Depreciation expense 90,000 Amortization expense 30,000 1,320,000 Net income $1,680,00 ...

Other / Other 08 Apr 2016

The three accounts shown below appear in the general ledger 1 Wayne Company reported net income of $265,000 for 2014. Wayne also reported depreciation expense of $45,000 and a loss of $8,000 on the sale of equipment. The comparative balance sheet shows a decrease in accounts receivable of $15,000 for the year, a $17,000 increase in accounts payable, and a $6,000 decrease in prepaid expenses. Instructions Prepare the operating activi ...

Other / Other 08 Apr 2016

Discuss the possible problems a corporation might have if its operations 1. The president of Silicon Company has just returned from a week of professional development courses and is very excited that she will not have to change the organization from a centralized structure to a decentralized structure just to have responsibility centers. However, she is somewhat confused about how responsibility centers relate to centralized organization ...

Other / Other 08 Apr 2016

The Assembly Division of American Car Company 1. The Assembly Division of American Car Company has offered to purchase 90,000 batteries from the Electrical Division for $104 per unit. At a normal volume of 250,000 batteries per year, production costs per battery are as follows: Direct materials $ 40 Direct manufacturing labor 20 Variable factory overhead 12 Fixed factory overhead 40 Total $112 The Electrical Division ha ...

Other / Other 08 Apr 2016

Increase in merchandise inventory during a period Set 1 — Indirect Method 1. For each of the following items, indicate by using the appropriate code letter, how the item should be reported in the statement of cash flows, using the indirect method. A. Added to net income B. Deducted from net income C. Cash outflow—investing activity D. Cash inflow—investing activity E. Cash outflow—financing act ...

Other / Other 08 Apr 2016