If a division’s contribution margin is greater than ZERO why is it wise to keep the division open if it is part of a large firm rather than closing it?

Q: The barrier to entry that helps reduce the threat of new entrants for an incumbent firm using a…

A: Cost Leadership: in cost leadership a company has lower cost of operation. Cost leadership company…

Q: Which of the following statements regarding the allocation of cost from other departments to the…

A: In a large firm with multiple departments, some are operating departments which produce or…

Q: Transfer Pricing Issues When transfer prices are based on actual cost, a supplying division oftenhas…

A: In order to provide an incentive for a supplying division to reduce costs, the transfer pricing…

Q: 1)What is cost behavior analysis? and Why is cost behavior analysis important to management?…

A: A break-even point is a point or number of units at which all the revenues generated by the company…

Q: What are the instances that the return of investment of a division is significantly larger than the…

A: Return on investment means the revenues to be expected from the investment made. A company or an…

Q: When a company is decentralized, top management will have little time to focus on long-term strategy…

A: 1) This statement is FALSE Decentralization means transfer of Authority , Responsibility ,…

Q: Which of the following is not an objective or potential advantage of transfer pricing?   A)  A…

A: In simple words transfer pricing represent the price that one division of company should charge to…

Q: If a company is a multiproduct firm. a. can only utilize CVP analysis if the contribution margin…

A: c)  a multiproduct firm can earn a lower than expected profit though the total number of units sold…

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: If a division manager's compensation is based upon the division's net income, the manager may decide…

A: Answer: If a division manager's compensation is based upon the division's net income, the manager…

Q: In a multi-product company, as the mix of the products being sold changes, the overall contribution…

A: Overall contribution margin is the mix of individual contribution margin with the weights of their…

Q: Which of the following is a good choice for a manager interested in fostering the cooperation of two…

A: At times the managers of companies may have to seek cooperation between different departments of the…

Q: In a decentralized organization, Co. X, Division A is evaluated according to ROI, while Division B…

A: I am answering the first question as per company's policy Residual income is the income earned by…

Q: sferred, what is the lowest acceptable transfer price as far as the selling division is pice…

A:

Q: If ROI is used to evaluate a manager’s performance for a relatively new division, which of the…

A: The correct option is b that is, Net book value using accelerated rather than straight-line…

Q: Michael Porter argues a firm cannot be at the same time a cost leader and a differentiator. Do…

A:

Q: Why might relevant costs analysis be bad for a company if used too frequently?   Multiple Choice…

A: Introduction: In managerial accounting, avoidable expenses that are only incurred in conjunction…

Q: If a division manager’s compensation is based upon the division’s net income, the manager may decide…

A: Absorption costing is a method of costing in which total cost whether fixed or variable will be…

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: “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: Which method is best suited to determine the value of a division orbusiness unit that is part of a…

A: Business valuation models help in determining the worth of the division or business unit. It is also…

Q: when a firm might use a single hurtle rather than different divisional or business unit rates. When…

A: Hurdle rate is the rate at which the upcoming or potential projects are evaluated. In other words,…

Q: Which of the following items would most likely not be incorporated into calculation of a division’s…

A: Solution: The evaluation of an investment center is based on income generated by the assets…

Q: hich of the following statements regarding the allocation of cost from other departments to the…

A: Allocation of Cost: It is the method of providing help to given the service organization's cost. The…

Q: Which of the following best describes a Joint-Product? a) It is the expected loss in the efficient…

A: When two products are manufactured in such a way that they cannot be manufactured without each…

Q: Differentiate between centralized and decentralized operations. In a decentralized company in which…

A: Requirement 1:   A centralized operation means all the roles and responsibilities are concentrated…

Q: earning Task No. 1 asper Corporation is organized in three separate divisions. The three divisional…

A: Return on investment for Carbvon division = Operating incomeInvested capital=P…

Q: The minimum transfer price for a selling division with excess capacity to accommodate the transfer…

A: The lower limit is the lowest price that the buyer can negotiate. The transfer price…

Q: Indicate whether its True or False. Then give an explanation! 2) When a division of a company…

A: Net Present Value is referred to as the method, which is used in financial analysis for determining…

Q: Which of the following is not a revenue driver factor which affects sales volume for a manufacturing…

A: Revenue driver factor affects the sales volume for manufacturing firms.  Management can use the cost…

Q: Select the best answer from the five listed below to fill in the blank. The best transfer price for…

A: transfer price are also known as the transfer cost which tells the amount that is set for the…

Q: In analyzing whether to build another regional branch, the salary of the Chief Operating Officer…

A: Solution: In analyzing whether to build another regional branch, the salary of  the chief operating…

Q: a. What amount of joint product cost would be allocate to each product? b. What is financial…

A: Lets understand the basics. For allocating joint process cost, there are various methods are…