Question : 17) The president of Silicon Company has just returned from : 1217127

 

17) 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 organizations where a few managers have most of the authority.

 

Required:

Explain how a centralized organization might allow for responsibility centers.

 

Objective 22.3

 

1) A product may be passed from one subunit to another subunit in the same organization. The product is known as a(n):

A) interdepartmental product

B) intermediate product

C) subunit product

D) transfer product

 

2) Transfer prices should be judged by whether they promote:

A) goal congruence.

B) the balanced scorecard method.

C) a high level of subunit autonomy in decision making.

D) Both A and C are correct.

3) A transfer-pricing method leads to goal congruence when managers:

A) always act in their own best interest

B) act in their own best interest and the decision is in the long-term best interest of the manager’s subunit

C) act in their own best interest and the decision is in the long-term best interest of the company

D) act in their own best interest and the decision is in the short-term best interest of the company

 

4) Negotiated transfer prices are often employed when:

A) market prices are stable

B) market prices are volatile

C) market prices change by a regular percentage each year

D) goal congruence is not a major objective

 

5) The costs used in cost-based transfer prices:

A) are actual costs

B) are budgeted costs

C) can either be actual or budgeted costs

D) are lower than the market-based transfer prices

Answer the following questions using the information below:

 

Penn Oil Corporation has two divisions, Refining and Production. The company’s primary product is Luboil Oil. Each division’s costs are provided below:

 

Production:              Variable costs per barrel of oil$ 9

Fixed costs per barrel of oil$ 6

Refining:Variable costs per barrel of oil$30

Fixed costs per barrel of oil$36

 

The Refining Division has been operating at a capacity of 40,000 barrels a day and usually purchases 25,000 barrels of oil from the Production Division and 15,000 barrels from other suppliers at $60 per barrel.

 

6) What is the transfer price per barrel from the Production Division to the Refining Division, assuming the method used to place a value on each barrel of oil is 180% of variable costs?

A) $16.20

B) $27.00

C) $54.00

D) $70.20

 

7) What is the transfer price per barrel from the Production Division to the Refining Division, assuming the method used to place a value on each barrel of oil is 110% of full costs?

A) $16.50

B) $66.00

C) $72.60

D) $89.10

8) Assume 200 barrels are transferred from the Production Division to the Refining Division for a transfer price of $18 per barrel. The Refining Division sells the 200 barrels at a price of $120 each to customers. What is the operating income of both divisions together?

A) $7,200

B) $7,800

C) $10,800

D) $20,400

 

 

 

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more