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Based on Segment Reporting, Transfer Price Decisions, and Balanced Scorecard. The consulting division of IBM Corporation is often involved in assignments for which IBM computer equipment is sold as part of a system installation. The Computer Equipment Division is frequently a vendor of the Consulting Division in cases for which the Consulting Division purchases the equipment from the Computer Equipment Division. The Consulting Division does not view itself as a sales arm of the Computer Equipment Division bus as a strong competitor to the major consulting firms of information systems. The Consulting Divisions goal is to maximize its profit contribution to the company, not necessarily to see how much IBM equipment it can sell. If the Consulting Division is truly an autonomous investment center, it has the freedom to purchase equipment from competing vendors if the consultants believe that a competitor's products serve the needs of a client better than the comparable IBM product in a particular situation.
Question a. In this situation, should corporate management be concerned about whether the Consulting Division sells IBM products or those of other computer companies? Should the Consulting Division be required to sell only IBM products?
Question b. Discuss the transfer-pricing issues that both the Computer Equipment Division manager and the Consulting Division manager should consider. If top management does not have a policy on pricing transfers between these two divisions, what alternative transfer prices should the division manager consider?
Question c. What is your recommendation regarding how the managers of the Consulting and Computer Equipment Divisions can work together in a way that will benefit each of them individually and the company as a whole?
Compute the current ratio, acid-test ratio, inventory turnover, and accounts receivable turn over, for 2019 rounded to 2 decimal places based on the data
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A company had net income of $450,000 in 2009 and $620,000 in 2010. The company had average total assets of $2,500,000 in 2009 and $3,000,000 in 2010. Calculate the return on total assets for 2009 and 2010. Comment on the results.
Where on the tax return is the following reported? Distribution of $4800 from ST Partnership. Her distributive share of the partnership passive taxable income was $5300. She had no prior passive losses.
A company published the following information in its financial statements for its 2015 annual report: Prepare the pro-forma 2016 income statement, balance sheet, and statement of cash flows.
Is An investor bought 100 shares of Microsoft stock through his broker last week. This is an example of secondary market transaction.
On July 1, 2010, Fox called all of the bonds and retired them. Bond premium was amortized on a straight-line basis. Before income taxes, what was Fox's gain or loss in 2010 on this early extinguishment of debt?
The tax rate enacted for 2015 and future years is 40%. Differences between the 2015 income statement and tax return are listed below. Warranty expense accrued for financial reporting purposes amounts to $5,000. Warranty deductions per the tax return ..
In the Annual Report, there are several concerns from management. Discuss these concerns, and identify other weaknesses not discussed by management. Then, recommend a course of action addressing these concerns.
How long do you have to pay that monthly amount? Over the course of each loan, how much total do you pay? How much of that is interest? How much interest will you pay in total?
production and sales data of Shingle Co. for March of the current year, prepare (a) a sales budget and (b) a production budget.
question as a new intern for the local branch office of a national brokerage firm you are excited to obtain an
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