Chapter 10 Decentralization Responsibility Accounting, Performance Evaluation, and Transfer Pricing

After studying this Chapter 10Decentralization  ResponsibilityAccounting, Performance Evaluation, and Transfer Pricing, you should be able to:

1. Define responsibility accounting and describe the four types of responsibility centers.
2. Explain why firms chose to decentralize.
3.  Compute and explain return on investment (ROI), residual income (RI), and economic value added (EVA).
4. Discuss the methods of evaluating and rewarding managerial performance.
5. Explain the role of transfer pricing in a decentralized firm.
6. Discuss the methods of setting transfer pricing.

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