Assume the following comments were recently overheard at an

Reference no: EM13599173

Assume the following comments were recently overheard at an international management accounting conference. For each group of comments below, state whether or not you agree with each set of comments, and provide a 2- to 3-paragraph rational for your position.

A. "My advice is to always pick up any special offer of irregular materials from your supplier. The only place you'll take a hit is on the direct materials usage variance; because you'll have more scrap. But you'll always make it up on the materials price variance."

B."In our company, every department is treated as a profit center. You can't really effectively evaluate a responsibility center unless you actually assign some revenues to it."

C. "We use cost-based transfer prices for all our transfers between responsibility centers. We use full cost, which includes production and nonproduction costs. It makes for the best situation, because we never have to waste time negotiating some artificial selling price."

D. "Our bonus system is easy, and I'm sure it maximizes performance. Whenever a division exceeds its budgeted output for the year, everyone in the division gets a 15 percent bonus based on his or her annual salary."

Reference no: EM13599173

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