12. LUnder the cost price approach, the transtor price is the price at which the The obiective of transfer pricing is to encourage e can be increased by doing so The ratio of sales to invested assets is called the invest oods and services between divisions if overall company income component of the rate of return on investment ced scorecard is a set of financial and nonfinancial measures that The balan reflect the performance of the business 15 MULTIPLE CHOICE The standard price and quantity of direct materials are separated because GAAP reporting requires this separation Standard prices change more frequently than standard quantities. Standard quantities are more difficult to estimate than standard prices. Direct materials prices are controlled by the purchasing department, and quantity used is controlled by the production department 2 Favorable volume variances may be harmful when Machine repairs cause work stoppages Production in excess of normal capacity cannot be sold. Supervisors fail to maintain an even flow of work. There are insufficient sales orders to keep the factory operating at normal capacity. d. Which of the following conditions normally would not indicate that standard costs should be revised? Actual costs differed from standard costs for the preceding week. The company has signed a new union contract which increases the factory wages on average by $2.00 per hour. The engineering department has revised product specifications in responding to customer suggestions. The world price of raw materials increased. b. c. d. 4. Standards that represent levels of operation that can be attained with reasonable effort are called: a. Theoretical standards. b. Normal standards. c. Variable standards. d. Ideal standards. 12.- Under the cost price approach, the transfer price is the price at which the product or service transferred could be sold to outside buyers. 13. The objective of transfer pricing is to encourage each division manager to transfer goods and services between divisions if overall company income can be increased by doing so. 14. The ratio of sales to invested assets is called the investment turnover component of the rate of return on investment The balanced scorecard is a set of financial and nonfinancial measures that reflect the performance of the business. MULTIPLE CHOICE The standard price and quantity of direct materials are separated becaus a. GAAP reporting requires this separation. b. Standard prices change more frequently than standard quantitie 1. Standard quantities are more difficult to estimate than standar prices. Direct materials prices are controlled by the purchasing department, and quantity used is controlled by the producti department. c. d. Favorable volume variances may be harmful when a. Machine repairs cause work stoppages. b. Production in excess of normal capacity cannot be solo c. Supervisors fail to maintain an even flow of work. d. There are insufficient sales orders to keep the factory normal capacity ditions normally would not in