Questions from Managerial Accounting

Q: Why do some companies use gross book value instead of net book

Why do some companies use gross book value instead of net book value to measure a division’s invested capital?

Q: Explain why it is important in performance evaluation to distinguish between investment

Explain why it is important in performance evaluation to distinguish between investment centers and their managers.

Q: Describe an alternative to using ROI or residual income to measure investment

Describe an alternative to using ROI or residual income to measure investment-center performance

Q: How does inflation affect investment-center performance measures?

How does inflation affect investment-center performance measures?

Q: List three nonfinancial measures that could be used to evaluate a division

List three nonfinancial measures that could be used to evaluate a division of an insurance company.

Q: Discuss the importance of nonfinancial information in measuring investment-center performance

Discuss the importance of nonfinancial information in measuring investment-center performance.

Q: Identify and explain the managerial accountant’s primary objective in choosing a transfer

Identify and explain the managerial accountant’s primary objective in choosing a transfer-pricing policy

Q: Describe four methods by which transfer prices may be set.

Describe four methods by which transfer prices may be set.

Q: Why might income-tax laws affect the transfer-pricing policies

Why might income-tax laws affect the transfer-pricing policies of multinational companies?

Q: Timing is the key in distinguishing between absorption and variable costing.

Timing is the key in distinguishing between absorption and variable costing. Explain this statement