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The City of Medina Park operates a plumbing and electrical maintenance department, responsible for maintaining all water and electric service functions in buildings owned by the city. The city administration is concerned about the rising costs of the maintenance department, which is currently organized as a cost center. Charlotte Daugherty, the manager of the maintenance department, says that many of the department's service calls are strictly nuisance calls. She cites examples of numerous calls for defective electrical outlets, which turn out to be unplugged equipment, burned-out light bulbs (which can easily be changed by the users), and drains clogged by coffee grounds. In Charlotte's opinion, these nuisance calls would be avoided if the departments using her department's services were "billed". Essentially, Charlotte suggests that there be a transfer price related to using her department's services and that the price should approximate the cost of these services in the market ($50 - $65 per hour of service time). This would turn her operation into a profit center, and , she believes, her department would operate more efficiently because demand for services would decline and she would need fewer employees. Evaluate Charlotte's proposal. Do you support use of a transfer price for maintenance services? If so, should the price approximate the market price of service or should it be based on cost?
In the preparation of the 2006 consolidated financial statements, what is the dollar amount of the worksheet elimination to 2006 Retained Earnings with respect to this transaction?
Critics have charged that compensation to top management in the United States is simply too high and should be cut back. If compensation is tied to performance, should there be a ceiling on an executive's earnings? Explain at least two pros an..
Determine the nonseparately computed income or loss. What is the portion of ordinary income or loss for Zariat, one of the three shareholders?"
Net income (or net loss) during 2010, assuming that as of December 31, 2010, assets were $960,000, liabilities were $156,000, and no additional capital stock was issued or dividends distributed.
ABC Company owns 40 percent of JMT Company and 95 percent of DEM Company. JMT pays a $100,000 dividend to ABC and DEM pays a $40,000 dividend to ABC in 2013. Assuming that ABC has $1,000,000 of taxable income, calculate ABC's dividends receive..
What was the amount of cash payments for income tax - briefly explain why the cash received from customers in (a) is different than sales.
Determine the annual (1) net income and (2) net annual cash flows for the commuter service. Compute (1) the cash payback period and (2) the annual rate of return.
during 2009 a thompson corporation spent 170000 in research and development costs. as a result a new product called the
peachtree complete accounting allows for roles to be assigned as sales reps or vendor reps. give your opinion on what
equipment which cost 213000 and had accumulated depreciation of 114000 was sold for 121000. this transaction should be
profitability ratios elizabeth tailors inc. has assets of 8000000 and turns over its assets 2.5 times per year. return
in order to encourage employee ownership of the companys 1 par common shares washington distribution permits any of its
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