1. In a decentralized organization in which subunits may buy goods from one another, the transfer-pricing system should be designed primarily to

   	a.	allow subunit managers to buy from external parties
   	b.	increase the consolidated value of inventory
   	c.	minimize the degree of autonomy of subunit managers
   	d.	evaluate performance of individual subunits and their managers

5 points

Question 20

1. Revenues	950,000
   Variable costs	575,000
   Traceable fixed costs	336,500
   Average invested capital	350,000
   Imputed interest rate	10%

   The ROI is

   	a.	4%
   	b.	10%
   	c.	11%
   	d.	37%