Business / Management Accounting Ch 12 Problems

Management Accounting Ch 12 Problems

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Autor:  reviewessays  18 July 2010
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a. greater corporate profits

b. the same amount of corporate profits

c. less corporate profits

d. resulting profits cannot be determined

53. If the Fish & Meat department had been discontinued, the short-term effect on corporate profits would be a decrease of:

a. $35,000

b. $14,000

c. $11,000

d. $4,000

54. Assume that the Sundries department has been discontinued and long-term capacity of the company has had time to adjust. The projected long-term effect of this action on annual corporate profits would be a decrease of:

a. $20,000

b. $12,000

c. $9,000

d. $2,000

55. Assume an advertising campaign could increase revenues for any of the products by $15,000. To maximize corporate profits, the __________ department should receive the advertising dollars. Assume the cost of the advertising campaign is less than the revenues it generates.

a. Sundries

b. Fish & Meat

c. Produce

d. From the information given, the correct product line cannot be determined.

56. If a company subscribes to the controllability principle, then it would be best to evaluate product line management on:

a. contribution margin

b. corporate profit

c. segment income

d. segment margin

57. The primary goal of transfer pricing is to:

a. motivate the decision maker to act in the organization's best interests

b. obtain a high transfer price for the supplying unit

c. obtain a high transfer price for the receiving unit

d. agree on a price for external sales

58. All of the following are true of market-based transfer prices EXCEPT that they:

a. may lead to goods/services being purchased externally

b. provide an independent valuation

c. exist for all transferred products and services

d. provide the proper econom

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