題目

?Perrin Co has two divisions, A and B.?

Division A has limited skilled labour and is operating at full capacity making product Y. It has?been asked to supply a different product, X, to division B. Division B currently sources this?product externally for $700 per unit.?

The same grade of materials and labour is used in both products. The cost cards for each?product are shown below:?

Product? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?Y? ? ? ? ? ? ? ? ? ? ? ? X?

? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?($)/unit? ? ? ? ? ? ? ($)/unit?

Selling price? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? 600? ? ? ? ? ? ? ? ? ? ?–?

Direct materials ($50 per kg)? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?200? ? ? ? ? ? ? ? ? 150?

Direct labour ($20 per hour)? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?80? ? ? ? ? ? ? ? ??120?

Apportioned fixed overheads ($15 per hour)? ? ? ? ? ? ? ? ? ? ? ? ? ?60? ? ? ? ? ? ? ? ? ? 90?

Using an opportunity cost approach to transfer pricing, what is the minimum transfer?price??

A

?$270?

B

?$750?

C

?$590?

D

?$840?

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Chapter17Divisionalperformanceandtransferpricing

Using the opportunity cost approach to transfer pricing, the minimum price charged by?the transferring division must be the marginal (variable) cost of producing X + the?contribution that is lost from selling however many units of Y could have been made for?each X.?

‘Division A has limited skilled labour’ means that skilled labour is a scarce resource. If?Division A now has to make X instead of Y, it will lose the contribution it currently makes?on Product Y. This contribution is equal to $600 selling price – $200 Material costs –?$80 labour costs = $320.?

It takes 4 hours to make a Y and 6 hours to make an X. So, every time we (in Division A)?make an X, we will not make 1.5Ys because of the shortage of skilled labour. So we lose?1.5 Y × Contribution per unit $320 = $480.?

We add to this lost contribution a marginal cost of making an X of $150 (material) + $170?(labour).?

Total transfer price = $480 + $150 + $120 = $750?

Therefore, if Division A is to be no worse off by selling Product X to Division B instead of?Product Y externally, the contribution per labour hour from selling X must also be $80.?The opportunity cost is therefore $80 per labour hour.??

Since it uses 6 labour hours to make one unit, one unit must generate a contribution?(i.e. opportunity cost in this context) of 6 × $80 i.e. $480. To arrive at a minimum transfer?price, the marginal cost of producing X must be added. Total variable cost per unit of?X = $150 + $270. Therefore, the minimum transfer price is $750.?

多做幾道

?The following statements have been made about material price planning variances:?

(1) The publication of material price planning variances should always lead to automatic?updates of standard costs.?

(2) The causes of material price planning variances do not need to be investigated by?managers at any level in the organisation.?

Which of the above statement(s) is/are true??

A

?(1) only?

B

?(2) only?

C

?Neither (1) nor (2)?

D

?Both (1) and (2)?

?Leaf limited has had a mixed year. Its market share has improved two percentage points to?20% but the overall market had contracted by 5% in the same period.? The budgeted sales?were 504,000 units and standard contribution was $12 per unit.?

?What is the level of actual sales??

A

?Two percentage points up on budget at 510,080 units?

B

?Three percent down overall on budget at 488,880 units?

C

?Three percent up on budget at 519,120 units?

D

?Up by a little over five and a half percent to 532,000 units?

?The finance director of Paint Mixers Ltd has produced the table below showing the variance?results for the first three months of the year:?

? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?January? ? ? ? ? ? ? ? ? ? February? ? ? ? ? ? ? ? ? ?March?

Material price variance? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? $3,000 A? ? ? ? ? ? ? ? ? ?$2,000 A? ? ? ? ? ? ? ? ?$1,000 A?

Material mix variance? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?$2,000 A? ? ? ? ? ? ? ? ? ? ? $750 A? ? ? ? ? ? ? ? ? ? ?$100 F?

Material yield variance? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?$4,000 A? ? ? ? ? ? ? ? ? ?$2,000 A? ? ? ? ? ? ? ? ? ? ? ? $50F?

Which of the following interpretations of the variances analysis exercise above is NOT?correct???

A

?The purchasing manager should be able to threaten to switch suppliers to get better?deals and address the adverse material price variance?

B

?The materials mix variance is entirely under the control of the production manager?

C

?The favourable yield variance in March could be the result of operational efficiency?

D

?The responsibility for the initial poor performance must be borne by both the?purchasing manager and the production manager?

?The following statements have been made in relation to the use of standard costs in rapidly?changing environments:?

(1) Variance analysis results will take into account important criteria such as customer?satisfaction or quality of production.?

(2) Achieving standards is suitable in most modern manufacturing environments.?

Which of the above statement(s) is/are true??

A

?(1) only?

B

?(2) only?

C

?Neither (1) nor (2)?

D

?Both (1) and (2)?

?The following statements have been made about planning and control as described in the?three tiers of Robert Anthony’ s decision-making hierarchy:?

(1) Strategic planning is concerned with making decisions about the efficient and?effective use of existing resources.?

(2) Operational control is about ensuring that specific tasks are carried out efficiently?and effectively.?

Which of the above statements is/are true??

A

?(1) only?

B

?(2) only?

C

?Neither (1) nor (2)?

D

?Both (1) and (2)?

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