Indicate whether each of the following statements constitutes a potential advantage (A), disadvantage (D), or neither (N)
Question:
Indicate whether each of the following statements constitutes a potential advantage (A), disadvantage (D), or neither (N) of using transfer prices for support department costs.
a. Requires additional organizational data and employee time
b. Puts all support departments on an equal footing
c. Reduces goal congruence
d. Makes a support department into a profit center
e. Increases resource waste
f. Improves ability to evaluate performance
g. Increases communication about which additional services are needed and which ones can be reduced or eliminated
h. Increases disagreements among departments
i. Causes certain services to be under- or overutilized
j. Makes users and providers more cost conscious
k. Measures benefits provided to operating departments
l. Includes costs outside a manager's control
Step by Step Answer:
Cost Accounting Foundations And Evolutions
ISBN: 9781618533531
10th Edition
Authors: Amie Dragoo, Michael Kinney, Cecily Raiborn