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The City of Medina Park operates a plumbing and electrical maintenance department, responsible for maintaining all water and electric service functions in buildings owned by the city. The city administration is concerned about the rising costs of the maintenance department, which is currently organized as a cost center. Charlotte Daugherty, the manager of the maintenance department, says that many of the department's service calls are strictly nuisance calls. She cites examples of numerous calls for defective electrical outlets, which turn out to be unplugged equipment, burned-out light bulbs (which can easily be changed by the users), and drains clogged by coffee grounds. In Charlotte's opinion, these nuisance calls would be avoided if the departments using her department's services were "billed". Essentially, Charlotte suggests that there be a transfer price related to using her department's services and that the price should approximate the cost of these services in the market ($50 - $65 per hour of service time). This would turn her operation into a profit center, and , she believes, her department would operate more efficiently because demand for services would decline and she would need fewer employees. Evaluate Charlotte's proposal. Do you support use of a transfer price for maintenance services? If so, should the price approximate the market price of service or should it be based on cost?
An accounting firm, provides consulting and tax planning services. A recent analysis found that 55% of the firm's billable hours to clients resulted from tax planning and for many years, the firm's total administrative cost (currently $270,000) ha..
Which is not a GAAP for investments in equity securities? a. replacement value method b. market value method c. Equity method d. consolidation
Eddy Money signed a three-year contract to host the Tonight Show. Although he will receive $130 million dollars over three years, the terms of the contract are that he is to receive $10 million at the end of each of the next three years plus an ad..
bill beck bruce beck and barb beck formed the bbb partnership by making capital contributions of 77400 301000 and
Prepare Friday's audit report that was submitted to Kim's board of directors 2011 and 2010 comparative financial statements. Kim is a public company.
Briefly describe the content of the reference and how it relates to your course project. Anonymous authors or web pages are not acceptable. At least three of those sources used should be from academic journals and/or professional publications...
Mr. Sullivan is borrowing $2,000,000 to expand his business. The loan will be for ten years at 12% annual interest and will be repaid in equal quarterly installments. How much will each quarterly payment be?
Calculate category of quality costs as a percentage of sales and calculate total quality costs as a percentage of sales.
Williams & Co., a member of the Private Companies Practice Section, is to have a "peer review." The peer review can be performed by: a CPA firm selected by Williams & Co.
At normal capacity of 8,000 units, budgeted manufacturing overhead is: $48,000 variable and $135,000 fixed. If Wayman had actual overhead costs of $187,500 for 9,000 units produced, what is the difference between actual and budgeted costs
Hannah Company maintains two separate accounts payable computer systems. One is known to all the users, and is used to process payments to vendors.
Discuss the rationale underlying the design of the performance report you chose.
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