100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Previously searched by you
Previously searched by you
logo
ACG - Module 23: Segment Reporting, Transfer Pricing, and Balanced Scorecard. Questions and Answers. $12.49
Add to cart
Quickly navigate to
Preview
  2.  
  3. Seminole State College
  4.  
  5. ACG - Module 23

Exam (elaborations)

ACG - Module 23: Segment Reporting, Transfer Pricing, and Balanced Scorecard. Questions and Answers.
 0 purchase
  • Course
  • ACG - Module 23
  • Institution
  • Seminole State College

ACG - Module 23: Segment Reporting, Transfer Pricing, and Balanced Scorecard. Questions and Answers. Segment Reporting, Transfer Pricing, and Balanced Scorecard DISCUSSION QUESTIONS Q23-1. Segment reports are income statements that show operating results for portions or segments of a busine...

[Show more]

Preview 4 out of 35  pages

Document information

  • August 19, 2022
  • 35
  • 2022/2023
  • Exam (elaborations)
  • Questions & answers

Subjects

  • transfer pricing
  • transfer pricing
  • acg
  • transfer pri
  • acg module 23 segment reporting
  • and balanced scorecard questions and answers
  • acg module 23 segment reporting
  • module 23 segment reporting

Written for

  • Seminole State College
  • ACG - Module 23
All documents for this subject (1)

Seller

avatar-seller
registered_nurse

Reviews received

Content preview

Module 23
Segment Reporting, Transfer Pricing,
and Balanced Scorecard

DISCUSSION QUESTIONS

Q23-1. Segment reports are income statements that show operating results for portions or
segments of a business, while product reports are only for product lines of the
business. Product reports are a type of segment reports.

Q23-2. A reporting objective is an identified segment of a business that management has
defined as precisely as possible so that only related revenues and expenses are
assigned to it for reporting purposes.

Q23-3. If a company wants to evaluate its operations from different perspectives, it may have
more than one first-level set of statements. For example, it may want its product lines
segregated as first-level segments and also its divisions segregated as first-level
segments. Both first-level segment statements may have other defined segments as
second-level segment statements.

Q23-4. A first-level segment statement is the primary reporting of operations within the
company (an example being territories). A second-level segment statement is a
means of further defining a first-level statement. If territories are first-level statements,
each one of them can be further divided into second-level statements with
characteristics such as product lines, sales personnel, or type of customers
(wholesale, retail, etc.).

Q23-5. Direct segment costs are often defined negatively as the costs that would not be
incurred if the segment being evaluated were discontinued. Common, or indirect,
segment costs are related to more than one segment, and all or some of these costs
would remain if the segment were discontinued. Indirect segment costs, also referred
to as common segment costs, are related to more than one segment and are not
directly traceable to a particular segment.


©Cambridge Business Publishers, 2015
Solutions Manual, Module 23 23-1

,Q23-6. Management needs segment reports about the product or characteristic under
consideration, a correct defining of direct and indirect costs of the segment, and an
evaluation of the importance of the segment to the overall operations of the business.

Q23-7. Transfer prices are normally used in decentralized operations when products or
services are exchanged between divisions to determine whether organizational
objectives are being achieved in each division regarding costs and profits.

Q23-8. Transfer pricing problems include: the selling division wanting the highest possible
price and the buying division wanting the lowest possible price; suboptimization when
prices are set that are not in the best interest of the overall organization; transfers
where there are no external markets for comparison; and conflicts between managers
that may interfere with other decision-making activities, thereby causing further
conflicts.

Q23-9. Suboptimization occurs when the parts of an organization maximize their own
performance measures even if it is to the detriment of the entire organization. It can
be minimized by proper training and goal setting within the organization. The reward
system also influences the amount of suboptimization that takes place. It usually
cannot be eliminated because individual managers tend to be self-survivors and, in
doing so, tend to always help themselves first and the company second.

Q23-10. ROI measures the earnings of an investment and is used to evaluate the utilization of
the resources, the effectiveness and efficiency of the managers in control of the
resources, and comparisons of investments both within the organization and with other
organizations. This measure is often preferred over net income because net income
does not take into consideration the amount of resources used to generate the income.

Q23-11. Advantages of residual income and economic value added over return on investment
include:
1. Encourages managers to make profitable investments above the minimum rate of
return, even when they are below the current ROI level.
2. Results are measured in dollars rather than percentages.

Q23-12. Residual income is the excess of investment center income over the minimum rate of
return set by top management, whereas EVA uses the organization’s weighted
average cost of capital, net assets, and after-tax income.




©Cambridge Business Publishers, 2015
23-2 Financial & Managerial Accounting for MBAs, 4th Edition

,Q23-13. The balanced scorecard helps with the evaluation process by including multiple
categories to be evaluated, the most common of which are financial, customers,
employees, productivity, and growth and innovation.

Q23-14. By structuring the balanced scorecard around the company’s strategic goals, it
measures how well managers are performing in terms of the company’s strategic
goals. The balance scorecard will always include basic financial performance
measures, but it should also score performance on key strategic objectives.




©Cambridge Business Publishers, 2015
Solutions Manual, Module 23 23-3

, MINI EXERCISES

M23-15.
a. A single-level segment report might show the total income statement broken down into
the four different lines of computer devices. Another possibility would be to segment the
total income statement broken down by the company’s three plants. Still another
possibility is to show the total income statement broken down by the five regions.

b. Note: Several schematics are possible and two examples are provided.

Scheme 1
First-level Product lines
Second-level Sales region
Third-level Plant location

Product line is chosen as the first level because this is the most important reporting
aspect to top management. This is often used when the products are highly competitive
and each one needs careful monitoring.

Scheme 2
First-level Sales region
Second-level Product line
Third-level Plant location

Sales region is chosen to emphasize the need for different regions to compete against
each other. This is especially beneficial when the regions have about the same potential
sales levels.




©Cambridge Business Publishers, 2015
23-4 Financial & Managerial Accounting for MBAs, 4th Edition

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller registered_nurse. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $12.49. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

63950 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 15 years now

Start selling

Recently viewed by you

Package deal ·

(0)

Florida Drivers License Bundled Exams Questions and Answers 100% Verified and Updated | Graded A+

Summary ·

(0)

Samenvatting Hoofdstuk 7 - Geïntegreerde Cognitieve Gedragstherapie (Korrelboom & Ten Broeke, 2023)

Package deal ·

(0)

LPC Business Law, Dispute Resolution, and Real Estate Bundle (Units 1 -16) - DISTINCTION NOTES

Exam (elaborations) ·

(0)

FGCU A&P 1: Exam 1 review Questions And Answers Rated A+ New Update Assured Satisfaction

Package deal ·

(0)

PACKAGE DEAL FOR ECN 211 EXAMS::::: QUESTIONS AND CORRECT ANSWERS | LATEST UPDATE 2024/2025 (ASU)

Exam (elaborations) ·

(1)

NASM CPT Final Exam Questions and Answers (Verified Solutions) Latest Update 2023 GRADED A+.

Summary ·

(0)

Complete Samenvatting 2021 Grondrechten (8.5 gehaald) | INCLUSIEF opdrachten + uitgebreide antwoorden

Package deal ·

(0)

BUSML 3250 Bundled Exams Questions and Answers Latest Versions (2024/2025) (Complete and Accurate)

Exam (elaborations) ·

(0)

Esthetician Exam Finals I- Facial Treatments Questions and Answers 2024/2025| Updated and Scored A

$12.49
  • (0)
Add to cart
Added