a Why would the manager of plant A be unhappy with using the average cost as

A why would the manager of plant a be unhappy with

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a. Why would the manager of plant A be unhappy with using the average cost as the performance measure? b. What is an alternative performance measure that would make the manager of plant A happier? A B C Units Produced 10,000,000 20,000,000 30,000,000 Variable Costs $200,000 $450,000 $650,000 Fixed Costs $1,000,000 $1,000,000 $1,000,000
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Exercises Responsibility Accounting and Transfer Pricing 07.02.2020 3 c. Under what circumstances might the average cost be a better performance measure? 4. Transfer Prices and External Sourcing Levis is a large manufacturer of office equipment, including copiers. Its electronics division is a cost centre. Currently, electronics sells circuit boards to other divisions exclusively. Levis has a policy that internal transfers are to be priced at full cost (fixed + variable). Thirty percent of the cost of a board is considered fixed. The electronics division is operating at 75 percent of capacity. Because there is excess capacity, electronics is seeking opportunities to sell boards to non-Levis firms. The electronics division policy on non-Levis sales states that each job must cover full cost and a minimum 10 percent profit. Electronics division management will be measured on its ability to make the minimum profit on any non-Levis contracts that are accepted.
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