Question : 161. Materials used by Square Yard Products Inc. in producing Division : 1251702

Accounting

161. Materials used by Square Yard Products Inc. in producing Division 3’s product are currently purchased from outside suppliers at a cost of $5 per unit. However, the same materials are available from Division 6. Division 6 has unused capacity and can produce the materials needed by Division 3 at a variable cost of $3 per unit. A transfer price of $3.20 per unit is established, and 40,000 units of material are transferred, with no reduction in Division 6’s current sales.

How much would Square Yard Products total income from operations increase?
A. $32,000
B. $112,000
C. $80,000
D. $150,000

162. Materials used by Jefferson Company in producing Division C’s product are currently purchased from outside suppliers at a cost of $10 per unit. However, the same materials are available from Division A. Division A has unused capacity and can produce the materials needed by Division C at a variable cost of $8.50 per unit. A transfer price of $9.50 per unit is negotiated and 30,000 units of material are transferred, with no reduction in Division A’s current sales.

How much would Division C’s income from operations increase?
A. $0
B. $90,000
C. $15,000
D. $60,000

163. Materials used by Jefferson Company in producing Division C’s product are currently purchased from outside suppliers at a cost of $10 per unit. However, the same materials are available from Division A. Division A has unused capacity and can produce the materials needed by Division C at a variable cost of $8.50 per unit. A transfer price of $9.50 per unit is negotiated and 30,000 units of material are transferred, with no reduction in Division A’s current sales.

How much would Division A’s income from operations increase?
A. $0
B. $90,000
C. $30,000
D. $60,000

164. Materials used by Jefferson Company in producing Division C’s product are currently purchased from outside suppliers at a cost of $10 per unit. However, the same materials are available from Division A. Division A has unused capacity and can produce the materials needed by Division C at a variable cost of $8.50 per unit. A transfer price of $9.50 per unit is negotiated and 30,000 units of material are transferred, with no reduction in Division A’s current sales.

How much would Jefferson’s total income from operations increase?
A. $45,000
B. $120,000
C. $60,000
D. $150,000

165. The Ukulele Company’s radio division currently is purchasing transistors from the Xiang Co. for $3.50 each. The total number of transistors needed is 8,000 per month. Ukulele Company’s electronics division can produce the transistors for a cost of $4.00 each and they have plenty of capacity to manufacture the units. The $4 is made up of $3 in variable costs, and $1 in allocated fixed costs.

What should be the range of a possible transfer price?
A. No transfer should take place.
B. $3.51 to $3.99
C. $3.01 to $3.99
D. $3.01 to $3.49

166. Which transfer price approach is used when the transfer price is set at the amount sold to outside buyers?
A. Market Price
B. Cost Price
C. Negotiated Price
D. Variable Price

167. The transfer price which uses a variety of cost concepts is the
A. Negotiated Price Approach
B. Standard Cost Approach
C. Cost Price Approach
D. Market Price Approach

168. The transfer price that must be less than the market price but greater than the supplying division’s variable costs per unit is called
A. the cost price approach
B. the negotiated cost approach
C. the standard cost approach
D. the market price approach

169. Mandolin Company has two divisions. Division A is interested in purchasing 10,000 units from Division B. Capacity is available for Division B to produce these units. The per unit market price is $30 per unit, with a variable cost of $17. The manager of Division A has offered to purchase the units at $15 per unit. In an effort to make this transfer price beneficial for the company as a whole, what is the range of prices that should be used during negotiations between the two divisions?
A. $15 to $30
B. $15 to $17
C. over $30
D. $17 to $30

170. ABC Corporation has three service departments with the following costs and activity base:

Service DepartmentCostActivity Base for Allocation

Graphics Production$200,000# of copies

Accounting$500,000# of invoices processed

Personnel Department$400,000# of employees

ABC has three operating divisions, Micro, Macro and Super. Their revenue, cost and activity information are as follows:

MicroMacroSuper

Direct Revenues$700,000$850,000$650,000

Direct Operating Expenses$50,000$70,000$100,000

# of copies made20,00030,00050,000

# invoices processed700800500

# of employees130145125

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July 1, 2023

Assignment 1: LASA 2— Corporate Compliance

You are a corporate compliance officer for a hospital. You are also a feature writer for The Medical Reporter, an online health magazine. The editor asks you to write an 8-10 page feature story about the steps you should take when fraud and abuse cases are reported to a facility. This is very timely as you recently received a call on your “hotline” regarding a potential fraud and abuse issue. The caller indicated that Dr. Greedy was billing for services that had not been provided. You are in danger of losing reimbursement for Medicare and Medicaid programs if this behavior is not stopped. Your feature should address the ethical and moral components that healthcare providers and healthcare facilities face with fraud and abuse issues. Your research should include the following aspects:

I. How to conduct an investigation. It should include the following elements:

a. Reviewing the initial complaint: What are the items you should look for in a compliant to determine validity?

b. Notifying the appropriate upper management of the complaint unless they are implicated in the complaint: What are the steps to take to determine who is involved?

c. Obtaining additional information as necessary and developing a plan for the investigation: What other items are important to the investigation?

d. Conducting interviews with staff, residents and/or management: Delineate the types of questions to ask in the interview.

e. Determining if the allegations are substantiated or unsubstantiated: Identify criteria to determine if substantiated or unsubstantiated.

II. How to develop a correction action plan. The plan may suggest:

a. A recommendation for a subsequent audit or follow-up to the complaint and determination of when this is necessary.

b. A recommendation to refund any overpayments to federal government, insurance company or individual payer and when that may be the best course of action.

By Saturday, August 24, 2013, deliver your assignment to the M5: Assignment 1 Dropbox.

Use the following file naming convention: LastnameFirstInitial_M5_A1.doc.

Assignment 1 Grading Criteria	Maximum Points
Discussed the process for reviewing the initial healthcare fraud and abuse complaint and the items to look for to determine validity.	36
Explained the steps to take to determine who is involved in the complaint.	32
Discussed how to obtain additional information to develop a plan for the investigation and the items, which would be important to the investigation.	32
Explained how to conduct interviews with staff, residents and/or management and the types of questions to ask in the interview.	32
Identified the criteria to determine if the allegations are substantiated or unsubstantiated.	32
Explained how to determine when a recommendation for a subsequent audit or follow-up to the complaint is necessary.	36
Discussed the best course of action when a recommendation to refund any overpayments to federal government, insurance company or individual payer is warranted.	36
Written Components: Style (8 points): Tone, audience, and word choice Organization (16 points): Introduction, transitions, and conclusion Usage and Mechanics (16 points): Grammar, spelling, and sentence structure APA Elements (24 points): In text citations and references, paraphrasing, and appropriate use of quotations and other elements of style	64
Total:	300