Fifth edition Alnoor Bhimani Charles T. Horngren Srikant M. Datar Madhav V. Rajan Farah Ahamed


PART IV MANAGEMENT CONTROL SYSTEMS



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solutions-manual-to-bhimani-et-al-management-and-cost-accounting-pearson-2012-1
PART IV
MANAGEMENT CONTROL SYSTEMS
AND PERFORMANCE ISSUES


268
© Pearson Education Limited 2012
C HAP TE R 1 8
Control systems and transfer pricing
Teaching tips and points to stress
Management control systems
Teaching tips
Help students put Chapters 18 and 19 into perspective. Chapter 18 discusses management control systems, decentralisation and transfer pricing. Chapter 19 covers performance evaluation, emphasising problems encountered in decentralised companies, especially those organised into divisional investment centres. Evaluation of these divisions depends partly on their profits. If there are interdivisional transfers, then divisional profits cannot be determined until the transfer price is set. Establishing a transfer price (Chapter 18) precedes performance evaluation (Chapter 19). The following questions usually generate lively discussion. Should accountants limit the internal/financial category or should we expand our role to become information specialists What are the costs and benefits of such an expansion How will this decision affect the prosperity of accountants in the st century Accountants responsibility for items related to safety, health and the environment can provoke contentious debate.

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