快速查题-ACCA英国注册会计师试题

To prevent dysfunctional transfer price decision-making, profit centres must be allowed to make autonomous decisions. True or false? 

Which of the following is not a disadvantage of using market value as a transfer price? 

The following information relates to an investment centre, which is a separate product division in a large company. 

                                                                                       $ 

Net current assets                                                 60,000 

Non-current assets                                             240,000  

Profit before depreciation                                     50,000 

Depreciation                                                           10,000 

The company's cost of capital is 10%. What is the most appropriate measure of the centre's Return on Investment (ROI)? 

SWAL has two divisions, SW and AL, which operate as profit centres and have full autonomy in making, buying and selling decisions.  

SW manufactures SW+ at a cost of $12 per unit. The market price of SW+ is $16 per unit. 

AL uses SW+ in manufacturing its own product. The transfer price of SW+ when transferred from Division SW to Division AL is set at full production cost plus 20%. 

Which one of the following independent circumstances represents dysfunctional behaviour arising from SWAL's transfer pricing policy? 

 Dust Co has two divisions, A and B. Each division is currently considering the following separate projects:  

                                                                             Division A                   Division B 

Capital required for the project                    $32.6 million             $22.2 million 

Sales generated by the project                    $14.4 million               $8.8 million 

Operating profit margin                                         30%                             24% 

Cost of capital                                                         10%                             10% 

Current return on investment of division            15%                               9% 

If residual income is used as the basis for the investment decision, which division(s) would choose to invest in the project? 

 Oxco has two divisions, A and B. Division A makes a component for air conditioning units which it can only sell to Division B. It has no other outlet for sales. 

Current information relating to Division A is as follows: 

Marginal cost per unit                                                                                              $100 

Transfer price of the component                                                                           $165 

Total production and sales of the component each year                                2,200 units 

Specific fixed costs of Division A per year                                                     $10,000 

Cold Co has offered to sell the component to Division B for $140 per unit.

If Division B accepts this offer, Division A will be shut. If Division B accepts Cold Co’s offer, what will be the impact on profits per year for the group as a whole?