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Book/movie review
22/08/2022
Week 5 Discussion Forum (MKT6250 Healthcare Marketing)
Week 5 Discussion Forum (ECO550 Managerial Economics)
In an effort to stop the migration of many of the automobile manufacturing facilities from the Detroit area, Detroit’s city council is considering passing a law that would give investment tax credits to auto manufacturers. What this means is that it would reduce auto manufacturers’ costs of using capital and high-tech equipment in their production processes. On the evening of the vote, local union officials voiced serious objections to the law.
1. As a union official, outline the basis of your objection.
2. As a representative of one of the auto manufacturers, what are your counter arguments?
Unit 5 DB: Stakeholder or Stockholder (BUS411 Business Policy Seminar)
After completing this week’s readings, analyze a current or past organization where you have worked. Is your current organization managed by the stakeholder or stockholder approach? Do you agree/disagree with the approach that has been utilized? If you agree with the approach, please state why. If you disagree, what changes would you make? Be specific with your analysis.
Unit 5 Discussion (ACC450 Advanced Accounting)
What Price Should We Charge Ourselves? Page 232.
Slagle Corporation is a large manufacturing organization. Over the past several years, it has obtained an important component used in its production process exclusively from Harrison, Inc., a relatively small company in Topeka, Kansas. Harrison charges $90 per unit for this part:
Variable cost per unit $40
Fixed cost assigned per unit 30
Markup 20
Total price $90
In hope of reducing manufacturing costs, Slagle purchases all of Harrison’s outstanding common stock. This new subsidiary continues to sell merchandise to a number of outside customers as well as to Slagle. Thus, for internal reporting purposes, Slagle views Harrison as a separate profit center.
A controversy has now arisen among company officials about the amount that Harrison should charge Slagle for each component. The administrator in charge of the subsidiary wants to continue the $90 price. He believes this figure best reflects the division’s profitability: “If we are to be judged by our profits, why should we be punished for selling to our own parent company? If that occurs, my figures will look better if I forget Slagle as a customer and try to market my goods solely to outsiders.”
In contrast, the vice president in charge of Slagle’s production wants the price set at variable cost, total cost, or some derivative of these numbers. “We bought Harrison to bring our costs down. It only makes sense to reduce the transfer price; otherwise the benefits of acquiring this subsidiary are not apparent. I pushed the company to buy Harrison; if our operating results are not improved, I will get the blame.”
Will the decision about the transfer price affect consolidated net income? Which method would be easiest for the company’s accountant to administer? As the company’s accountant, what advice would you give to these officials?
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