ACCT 349 help A Guide to career/Snaptutorial ACCT 349 help A Guide to career/Snaptutorial | Page 17

external suppliers for $75 per unit. The following information is
available:
Y`s variable cost per unit
$70
Y`s annual fixed costs
$15,000
Y`s annual production of these parts for X
1,000 units
If Division X buys from an external supplier, the facilities Division Y
uses to manufacture these parts will be idle. Assuming g Division Y’s
fixed costs cannot be avoided, what is the result if Mar requires
Division X to buy from Division Y at a transfer price of $100 per
unit?
Chapter 23: Performance Measurement, Compensation, and
Multinational Considerations.
Review Questions and Exercises
1.Designing accounting-based performance measure for an
organization subunit requires three steps. Step 1 is to choose
performance measures that _____________ financial goals.
2.In the formula to calculate residual income, the required rate of
return multiplied by investment is called the ________ cost of the
investment.
3.__________cost is the cost of purchasing an asset today identical to
the one currently held, or the cost of purchasing an asset that provides
services like the one currently held if an identical asset cannot be
purchased.
4.An important consideration in designing compensation
arrangements is the trade-off between creating incentives to get the
manager to work hard and imposing ______ on the manager.
5. _________ describes situations in which an employee prefers to
exert less effort (or report distorted information) compared to the
effort (or accurate information) desired by the owner, because the
employee’s effort (or validity of the reported information) cannot be
accurately monitored and enforced.
6.Name the four levers of control _________________
Multiple Choice