The Accounting Department of Faber University asked the Publications Department to prepare a brochure for the Masters of Accountancy program. The Publications Department delivered the brochures and charged the Accounting Department a rate that was 20% higher than could be obtained from an outside printing company. The policy of the university required the Accounting Department to use the internal publications group for brochures. The Publications Department claimed that it had a drop in demand for its services during the fiscal year, so it had to charge higher prices in order to recover its payroll and fixed costs.
Should the cost of the brochure be transferred to the Accounting Department in order to hold the department head accountable for the cost of the brochure?
What changes in policy would you recommend?