“A company should not allocate all of its corporate costs to its divisions.” Do you agree? Explain.

Q: The Principal-Agent Problem arises A) because managers have little incentive to work in the…

A: The principal-agent problem is the problem that arises due to a conflict of interest between the…

Q: In an S Corporation are the unit holders liable for busin

A: Yes, they are liable for business losses too if they fulfill these requirements.

Q: rue and fair profit of any business can only be determined after charging depreciation because it is…

A: The two methods of depreciation are discussed below for their use in the production and service…

Q: 13. The costs of the executive management department are Multiple-Choice A. The tax benefit created…

A: The executive management department refers to the department in a company consisting of top-level…

Q: What financial arguments could you use to justify your proposed recommendations to segregate FLTs…

A: The question is based on concept of health care, safety and workplace ,mainly for workers at…

Q: In a decentralized company in which the divisions are organized as investment centers, how could a…

A: Decentralised operations: in the company where the power to take decisions is delegated to the…

Q: Which one of the following is the least likely reason a company may acquire an ownership interest in…

A: An acquisition occurs when a company acquires most of the shares of another company by making a huge…

Q: Large corporations often have many product-based divisions that cater to different markets. Why each…

A: It is important for large corporations to consider calculating the cost of capital for individual…

Q: Evaluate the similarities and differences between trusts and corporations. In an attempt to protect…

A: A legal entity acting as an agent of the individual or entity just to manage the assets and transfer…

Q: What are the three main reasons that many companies are terminating long-standing defined benefit…

A: Defined - Benefit Plan: Under this plan, an employee gets guaranteed/fixed pension income when…

Q: If a division’s contribution margin is greater than ZERO why is it wise to keep the division open if…

A: Formula to calculate contribution margin Sales price per unit Less: variable cost per unit…

Q: Assume that a company has decided not to allocate any support department costs to producing…

A: Cost allocation means assigns cost to different heads or departments. It is a good tool that can be…

Q: Firms often treat investment centers as if they were a... Revenue center Stand-alone business…

A: Decentralization: Decentralization alludes to a particular type of authoritative construction where…

Q: What are the differences in whether a limited liability company is member-managed or…

A: The limited liability company is typically a new form of entity and can be managed in 2 ways namely,…

Q: 2 Suppose that the contract cannot be accepted for financial reasons. Could outsourcing be a good…

A: Financial Management: Financial management comprises of two words i.e. Finance and management.…

Q: Can a project generate a negative taxable income for an operation firm?

A: A company that reports net income but negative cash from operations is attributable to a bad cash…

Q: Select Manufacturing Co. produces three joint products and one organic waste byproduct. Assuming the…

A:

Q: Richardson Company is contemplating the establishment of a share-based compensation plan to provide…

A: The financial accounting standard board (FASB) issues literature for accounting.

Q: Which of the following is not something that corporations can do with their profits?   a. Pay…

A: Corporations are large company or group of companies.

Q: Large corporations often have many product-based divisions that cater to different markets. Give two…

A: The cost of capital of a corporation is the cost of the funds of the corporation, that is the cost…

Q: Explain why, for large corporations, we should expect a low pay-performance relationship

A: In accounting pay performance relationship refers to the relationship between pay level of employees…

Q: “Once a company allocates corporate costs to divisions, these costs should not be reallocated to the…

A: Cost Allocation:The process of assigning the cost to the cost object is cost allocation. The cost…

Q: What is the unit cost below which Power Pack Company should not go in bidding on the government…

A:

Q: True and fair profit of any business can only be determined after charging depreciation because it…

A: “Since you have posted a question with many sub-parts, we will solve three sub-parts for you. To get…

Q: The manager of one division of a large firm receives compensation in the form of salary plus bonus.…

A: Ethics are defined as the particulars rules as well as guidelines set through the governing bodies…

Q: If the assumption that companies pay no tax in Modigliani & Miller Proposition is relaxed, while the…

A: Modigliani & Miller Propositions are an economic theory that state that the value of the firm is…

Q: 7) To reduce the excessive focus of subunit managers on their own subunits, many companies…

A: To reduce the excessive focus of subunit managers on their own subunits, many companies compensate…

Q: What is meant by the 'Agency problem' in the context of a Public Limited Company? How is it…

A: The question is based on the concept of Financial Analysis.

Q: Give the advantages/disadvantages of Share-based payments for services rendered by employees.

A: share based payment is a transactions in which the employees given the options to be subscribe for…

Q: Some argue against corporate involvement in socially responsible behavior because the costs incurred…

A:

Q: Which of the following micro events that can be eliminated by diversification?  a. all of them…

A: Micro events are the internal factor affecting the company at an individual level. Micro events are…

Q: Discuss why in many liability firms, the managers do not receive a fixed payment for their work, but…

A: Profits or sales. Sales are simply referred to as "revenue," which does not include any fees or…

Q: In most large corporations, ownership and management are separated. What are the main implications…

A: In the corporate world, the shareholders are the owners of the firm, they select the board of…

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit.  Overhead expenses depend upon the nature of the business operations.