题型：论述题 难度星级：★★★ 
15.2万热度
fill in the blanks.
ideally, a transfer price should be set that enables the individual divisions to maximise their profits at alevel of output that maximises ……………………. .
the transfer price which achieves this is unlikely to be a ……………….. transfer price or a……………. transfer price.
if optimum decisions are to be taken, transfer prices should reflect …………………. .
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an investment centre with capital employed of $570,000 is budgeted to earn a profit of $119,700 nextyear. a proposed fixed asset investment of $50,000, not included in the budget at present, will earn aprofit next year of $8,500 after depreciation. the company's cost of capital is 15%. what is the budgetedroi and residual income for next year, both with and without the investment
roi residual income
without investment ……………….. ………………..
with investment ……………….. ………………..
choose the correct words from those highlighted.
roi based on profits as a % of net assets employed will (a) increase/decrease as an asset gets older andits book value (b) increases/reduces. this could therefore create an (c) incentive/disincentive toinvestment centre managers to reinvest in new or replacement assets.
the transfer pricing system operated by a divisional company has the potential to make a significantcontribution towards the achievement of corporate financial objectives.
required
explain the potential benefits of operating a transfer pricing system within a divisionalised company.
a division with capital employed of $400,000 currently earns an roi of 22%. it can make an additionalinvestment of $50,000 for a five year life with nil residual value. the average net profit from thisinvestment would be $12,000 after depreciation. the division's cost of capital is 14%.
what are the residual incomes before and after the investment
this question appeared in the june 2015 exam.
at the start of the year, a division has non-current assets of $4 million and makes no additions ordisposals during the year. depreciation is charged at a rate of 10% per annum on all non-currentassets held at the end of the year. working capital is $0.5 million at the start of the year althoughthis is expected to increase by 20% by the end of the year. the budgeted profit of the division afterdepreciation is $1.2 million.
what is the expected roi of the division for the year, based on average capital employed
a27.59%
26.37%
18.39%
31.58%
there are two profit centres, a and b. profit centre a transfers a product to profit centre b, butcould also sell the product in an external market at a price of $30. the marginal cost of making theproduct in profit centre a is $8 per unit and the full cost is $14 per unit. there would be a variablecost of $1 per unit for sales and distribution to customers in the external market, but no such costsfor internal transfers.
to avoid disputes between the profit centre managers, what should be the transfer price for theproduct
$ _______
divisional performance measures
【论述题】
compare and contrast the use of residual income and return on investment in divisionalperformance measurement, stating the advantages and disadvantages of each.
division y of chardonnay currently has capital employed of $100,000 and earns an annual profitafter depreciation of $18,000. the divisional manager is considering an investment of $10,000 inan asset which will have a ten-year life with no residual value and will earn a constant annual profitafter depreciation of $1,600. the cost of capital is 15%.
calculate the following and comment on the results.
(i) the return on divisional investment before and after the new investment
(ii) the divisional residual income before and after the new investment
explain the potential benefits of operating a transfer pricing system within a divisionalisedcompany.
a government is looking at assessing hospitals by reference to a range of both financial andnon-financial factors, one of which is survival rates for heart by-pass operations andanother is ‘cost per successfully treated patient’.
which of the three e’s in the ‘value for money’ framework is not measured here
economy
effectiveness
efficiency
externality