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Write substantive post in response to one of the Chapter 10 Practice Questions on page 468 of the ebook/textbook.Be sure to write which each Chapter
Write substantive post in response to one of the Chapter 10 Practice Questions on page 468 of the ebook/textbook.Be sure to write which each Chapter 10 Questions responding at.
Pape 468 PRACTICE MATERIAL QUESTIONS 1. Explain how centralized and decentralized companies differ. What are the advantages and disadvantages of each? 2. Why does decentralization create the need for responsibility accounting in an organization? 3. What is the controllability principle, and why is it crucial to responsibility accounting? 4. Name the four types of responsibility centers and describe the managers' responsibilities and authority in each. 5. Briefly explain the difference between segment margin and net operating income. 6. Why are profit center managers evaluated on segment margin instead of net operating income? 7. How do investment center managers differ from profit center managers? 3. What role do return on investment and residual income play in responsibility accounting? 9. Return on investment may be separated into two components. Name them and describe what each can tell you. 10. Explain how relying on return on investment for performance evaluation of investment canter managers could lead to goal incongruence. 11. How is residual income calculated? 12. What benefit does residual income offer in comparison to return on investment when evaluating performance? 13. How does EVA differ from residual income? 14. What are the primary limitations of financial measures of performance? 15. Other than the one(s) mentioned in the text, give an example of an action that management might take to improve financial performance in the short run that could prove detrimental in the long run. 16. Explain the balanced scorecard approach to performance evaluation. What advantages does this approach have over using only financial measurements? 17. What are the four dimensions of a balanced scorecard?' What does each dimension represent? 13. Why must a company consider its incentive and reward system when implementing a balanced scorecard approach? 19. Why are incentive ayatems that emphasize long-term performance more consistent with a balanced scorecard approach? 20. What is a transfer price? 21. Explain why two managers employed by the same company may be diametrically opposed to each other when considering a transfer price 21. Explain the meaning of minimum and maximum transfer prices and identify who (the buyer or the seller) would determine each. 23. What is the market price method of transfer pricing? 24. How does excess capacity affect a transfer price? 25. Describe the cost-based method of transfer pricing. 26. What are negotiated transfer prices? Explain two possible disadvantages of allowing managers to negotiate a transfer priceStep by Step Solution
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