Questions from Cost Accounting

Q: “Let’s be more practical. DCF is not the gospel.

“Let’s be more practical. DCF is not the gospel. Managers should not become so enchanted with DCF that strategic considerations are overlooked.” Do you agree? Explain.

Q: Under what conditions is a market-based transfer price optimal?

Under what conditions is a market-based transfer price optimal?

Q: What is one potential limitation of full-cost-based transfer

What is one potential limitation of full-cost-based transfer prices?

Q: Give two reasons why the dual-pricing system of transfer pricing

Give two reasons why the dual-pricing system of transfer pricing is not widely used.

Q: “Cost and price information play no role in negotiated transfer prices

“Cost and price information play no role in negotiated transfer prices.” Do you agree? Explain.

Q: “Under the general guideline for transfer pricing, the minimum transfer

“Under the general guideline for transfer pricing, the minimum transfer price will vary depending on whether the supplying division has unused capacity or not.” Do you agree? Explain.

Q: In each of the following situations, determine whether job costing or

In each of the following situations, determine whether job costing or process costing would be more appropriate. a. A CPA firm b. An oil refinery c. A custom furniture manufacturer d. A tire manufa...

Q: How should managers consider income tax issues when choosing a transfer-

How should managers consider income tax issues when choosing a transfer-pricing method?

Q: Name three benefits and two costs of decentralization.

Name three benefits and two costs of decentralization.

Q: “Transfer pricing is confined to profit centers.” Do you agree

“Transfer pricing is confined to profit centers.” Do you agree? Explain.