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Unformatted text preview: 1 THE UNIVERSITY OF NEW SOUTH WALES SCHOOL OF ACCOUNTING ACCT2522 Management Accounting 1 Session 1, 2009 Tutorial Week 8 - Transfer pricing Overall Theme In previous weeks we have focused our attention on the use of management accounting information for costing purposes (e.g. ABC), processes improvement (e.g. ABM, process analysis), and for budget control (standard cost analysis). This week we switch our attention to another aspect of management accounting by exploring the concept of responsibility accounting. We look at how management accounting system can be designed to encourage desirable (goal-congruent) managerial behaviour and to reflect the autonomous nature of contemporary, de-centralised organisations. In particular, we examine two control mechanisms used in conjunction with the responsibility accounting system, namely, transfer pricing. We will consider how managers determine transfer prices, rationales behind these systems, their benefits and limitations. Along the way we will also consider the impact of interdependencies and why variability can play havoc on management accounting systems. Desired Learning Outcomes and Essential Reading Langfield-Smith, K., H. Thorne and R.W. Hilton (2009). Management Accounting 5e: Information for Managing and Creating Value , 5 th edition, McGraw-Hill Australia Pty Limited. Chapter 12 TOPIC 7 TRANSFER PRICING After completing this topic, you should be able to: 1. Explain the benefits and costs of decentralisation 2. Explain the benefits of transfer pricing systems 3. Understand the differences between different types of responsibility centres 4.4....
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This note was uploaded on 01/31/2012 for the course ACCT acct taught by Professor A during the Three '11 term at University of New South Wales.
- Three '11