One disadvantage of using after-tax income as a performance measure of divisional results is that it is an absolute measure which makes it difficult to compare divisions of significantly different sizes.
Answer the following statement true (T) or false (F)
True
Larger divisions can more easily show larger income than a smaller division can.
You might also like to view...
The maturity date for a six-month note issued on January 15 would be ________.
A) July 15 B) July 14 C) July 16 D) July 10
The Enhanced Products Division of Forrest Industries makes ceramic pots that are used to hold large decorative plants. During the current year, the division produced 10,000 pots and incurred the following costs:
*The equipment was purchased last year for $150,000 and has a current book value of $120,000, remaining useful life of four years, and a zero salvage value. If the equipment is not used to produce ceramic pots, it can be leased for $8,000 per year.**Includes supervisors' salaries and rent for manufacturing plant.Required:1) Assume Evergreen Industries uses a cost plus pricing strategy. What price should be charged for the ceramic pot product if
the division sets its price 40 percent above the unit product cost?2) A potential overseas customer who would not compete with the division's existing customers would like to purchase 1,000 ceramic pots but is not willing to pay the regular price. At what selling price would the division be indifferent about accepting the special order?3) Suppose the division has the opportunity to purchase the ceramic pot from another manufacturer for $60.The supplier is willing to hold sufficient inventories to meet Evergreen's demand. Should the division outsource its ceramic pots? Why or why not? What will be an ideal response?
During a period of rising inventory prices the LIFO cost flow method will result in higher total assets than FIFO.
Answer the following statement true (T) or false (F)
Identify a true statement about ethical decision making in business.
A. Ethical decision making should not rely on the personal values and principles of the individuals involved. B. Employees only have to deal with situations that call for ethical decision making once they reach managerial positions within organizations. C. At some point, every worker will be faced with an issue that will require ethical decision making. D. Companies are legally obligated to cover all ethical decisions by internal rules and regulations.