Managerial Accounting Review Ch 8 12

Agenda
– Submit term projects to TURNITIN ASAP
– Assignment #2 due April 1st 1159pm
• List the coauthor’s name in the subject line.

• Teaching Evaluation
• Transfer pricing (cont.)
– Stanco Inc.

• Review chapters 11 and 12 & the practice final
– Practice Q1 and Q2

• Review chapters 8 and 9 and the practice final
– Practice Q3 and Q4
ACTG 2020

Week 11

1

• Online Course Evaluations (ONCE)/ &
Seymour Schulich Teaching Excellence
Awards (Schulich TEA)
– TEA: http://schulich.yorku.ca/tea.
– ONCE: http://courseevaluations.yorku.ca
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ACTG 2020

2020 class: Sylvia Hsu
2020 R (2:30pm): Lab, Marisa Morriello
2020 V (8:30am): Lab, Marisa Morriello
2020 W (11:30am): Lab, Iva Charlopova

Week 11

2

Stanco Inc.
• Groups in the Right: Assume the role of Manager of the
Electronics Division; evaluate the impact of supplying XL5 internally for $9 on Division’s profitability
– Evaluate the impact of supplying XL5 internally for $12.5 on Division’s profitability • Groups in the Left: Assume the role of Manager of the Clock
Division; evaluate the impact of buying XL5 for $12.5 internally on profitability
– Manager of the Clock Division; evaluate the impact of buying XL5 for $9 internally on profitability

• CEO of Stanco Inc.: evaluate the impact of the internal transfer on firm’s profitability if the transfer price is $9
– CEO of Stanco Inc.: evaluate the impact of the internal transfer on firm’s profitability if the transfer price is or $12.5
– How do we prepare the financial analysis for Stanco Inc.?

ACTG 2020

Week 11

3

LO10

TRANSFER PRICING
• The transfer price affects the income of the buying and selling units and therefore affects: (1) the performance evaluations of both managers and (2) the operating decisions that the managers might make.
– If managerial decisions are unaffected and there are no tax complexities involving multinational companies, the transfer price has no impact on overall company profit. ACTG 2020

Week 11

4

Setting Transfer Prices