【導(dǎo)讀】lower-levelmanagers.motivation.mayharmlong-runprofitability.rate).long-runperspective.price.14.Fullcost,fullcostplus,variablecostplus.

　　

【正文】 ............ $ 875,000 $ 775,000 Original ROI = $875,000/$2,000,000 = % New ROI = $775,000/$2,000,000 = % The decrease in ROI will affect Raymond’s evaluation as a manager and his chance for bonuses and promotions. Still, the transfer pricing negotiations have given him valuable information. He is now aware that an outside pany is underpricing him on similar quality coffee。 he needs to determine why (., a more efficient cost structure) and whether this will also affect his own outside sales. 227 10–18 1. $120 2. Minimum: $108 Maximum: $120 Actual: $114 3. ($90 + $44)/2 = $67 Appliance Division: Additional revenue ($67 2,000) ........................... $ 134,000 Additional expenses ($44 2,000) ......................... 88,000 Additional profit ..................................................... $ 46,000 Manufactured Housing Division: Reduction of costs ($90 – $67) 2,000.................. 46,000 Total addition to profits ......................................... $ 92,000 228 10–19 1. The segment information prepared for public reporting purposes may not be appropriate for the evaluation of segment management performance because: ? An allocation of mon costs incurred for the benefit of more than one segment must be included for public reporting purposes. ? Common costs are generally allocated on an arbitrary basis. ? The segments identified for public reporting purposes may not coincide with actual management responsibilities. ? This information does not distinguish between a segment that is a poor investment and the performance of a manager who has done well despite adverse circumstances. 2. If their performance is evaluated on the basis of the information in the annual financial report, Webster Corporation’s segment managers may bee frustrated and dissatisfied because they would be held responsible for an earnings figure that includes the arbitrary allocation of mon costs and costs traceable to but not controllable by them. Performance evaluation on this basis would be demotivating. As a result of this dissatisfaction, managers may seek employment elsewhere. 3. Webster Corporation should define responsibility centers that coincide with managers’ actual responsibilities rather than using the segment rules developed for public financial reporting. All reports should be prepared utilizing the contribution approach which would separate costs by behavior and assign costs to segments only if they could be controlled by the segment. The report should disclose contribution margin, contribution controllable by segment managers, and contribution by each segment after the allocation of mon costs. 10–20 1. $200, because it could purchase the motor externally for that price. 2. $195, because that is equal to variable cost。 or $135 if labor is considered fixed (see answer to Requirement 3). 3. The environmental factor most important to this decision is the governmental prohibition against layoffs. This could turn direct labor into a strictly fixed cost. This particular prohibition is a serious one. 229 Some Spanish plants have been virtually closed for years, yet the firms must continue to pay the workers since the government has refused permission to lay off the workers. 10–21 1. Fred turned down the proposed investment as the ROI from the investment is 13% ($156,000/$1,200,000) pared to the current ROI of 16% ($2,560,000/$16,000,000). If the iron is produced, then the division’s ROI would decrease to % ($2,716,000/$17,200,000). 2. The iron should have been manufactured since the pany’s ine would increase $48,000 [$156,000 – (9% $1,200,000)]. 3. Yes. The project has a residual ine of $48,000 and accepting it would have increased the division’s residual ine. 4. Residual ine encourages managers to invest in projects that increase a firm’s ine, decreasing the likelihood that profitable investments will be turned down. ROI encourages managers to select those investments that provide the greatest return per dollar invested. ROI provides a relative mea sure of performance, making parisons among divisions possible. 5. Since ROI is the main performance measure, Fred was not willing to accept a profitable investment because it would decrease his division’s ROI. Facing a possible promotion, he chose to maintain the division’s high ROI rather than earn extra profits for the pany. The decision was motivated by selfinterest. Some may argue that the decision was encouraged by the pany’s reward system. This argument, however, is weak since it is virtually certain that the intent of higher management is to reward productive behavior, not manipulative behavior. From this perspective, the decision was wrong and, thus, uhical. However, Fred might argue that the true objective of the firm is to encourage and reward high return on investment. He may be able to develop an acceptably high ROI project in the next eight to 10 months. Thus, not accepting the immediate project may give him the ability to invest in a more profitable project later on. CYBER RESEARCH CASE 230 10–22 Answers will vary.