UNIVERSITAS INDONESIA
Review Question 17-1 Brickley, Smith, and Zimmerman, Managerial Economics and Organizational Architecture, 4th ed.
Tugas Mata Kuliah Economics of Organization Dosen Dr.Mustafa Edwin Nasution
Disusun Oleh Ari Wardani
0706306560
Jonathan HP.Babrayan
0906498295
Oktavia
0806479074
Herni Kurniawati
0806479055
Program Pascasarjana Ilmu Akuntansi Fakultas Ekonomi Universitas Indonesia Jakarta Okober 2009
STATEMENT OF AUTHORSHIP Kami yang bertandatangan dibawah ini menyatakan bahwa makalah/tugas terlampir adalah murni hasil pekerjaan kami sendiri.Tidak ada pekerjaan orang lain yang kami gunakan tanpa menyebut sumbernya.
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NAMA
: Ari Wardani
NPM
: 0706306560
TANDA TANGAN
: ______________________
NAMA
: Jonathan HP.Babrayan
NPM
: 0906498295
TANDA TANGAN
: ______________________
NAMA
: Oktavia
NPM
: 0806479074
TANDA TANGAN
: ______________________
NAMA
: Herni Kurniawati
NPM
: 0806479055
TANDA TANGAN
: ______________________
10/12/2009
Program Pascasarjana Ilmu Akuntansi Fakultas Ekonomi Universitas Indonesia
Review Question 17-1 Brickley, Smith, and Zimmerman, Managerial Economics and Organizational Architecture, 4th ed.
Presented By : Ari Wardani Jonathan HP.Babrayan
0706306560 0906498295
Economics of Organization
Program Pascasarjana Ilmu Akuntansi Fakultas Ekonomi Universitas Indonesia
Summary Architecture Organization
Organizational Architecture: • Decision-right assignment
STRATEGY :
– empowering employees
Basis of Competition
• Reward system y
(Price,Quality,Service) Choice of Industries
Incentive and Action
– compensating employees
• Performance-evaluation system
Firm Value
– evaluating employees
Measuring divisional performance
• Cost centers—e.g. manufacturing • Expense centers—e.g. personnel, accounting • Revenue centers—e.g. sales, distribution • Profit centers—combined cost and revenue centers • Investment centers—profit centers with decision rights on capital outlays
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10/12/2009
Program Pascasarjana Ilmu Akuntansi Fakultas Ekonomi Universitas Indonesia
Economics of Organization
Review Question 17‐1 • Auto‐fit is a multi divisional firm that produces auto part it has the capacity for annual production of 100 units of a particular parts. The marginal cost of production each unit is $10 .These unit price can be sold internally either to other divisions or to external customers. The external market price is $20 .The allocated share of corporate overhead for each part produced is $5.Total corporate overhead expenditures y p p y do not vary with production of the part .How many units of the part should company produce.what is the theoretically correct transfer price (should the company decide to transfer internally)?. Explain.
Program Pascasarjana Ilmu Akuntansi Fakultas Ekonomi Universitas Indonesia
Economics of Organization
Summary of Auto‐Fit 9produces auto part 9annual annual production of 100 production of 100 9marginal cost of production each unit is $10 9unit price can be sold internally either to other divisions or to external customers 9external market price is $20 9allocated share of corporate overhead for each part produced is $5
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10/12/2009
Economics of Organization
Program Pascasarjana Ilmu Akuntansi Fakultas Ekonomi Universitas Indonesia
Transfer Pricing • Price paid for intra-organizational transfers of goods and services • Choice determines both distribution of profits among units and overall profits • Measurement – Costless informationÖprofit p maximization – Asymmetric information
Program Pascasarjana Ilmu Akuntansi Fakultas Ekonomi Universitas Indonesia
Economics of Organization
Transfer Pricing methods ¾ Market base
Transferred at the external market price
¾ Marginal cost
Transferred at the marginal production cost
¾ Full cost
Transferred at the full cost to avoid wasteful disputes over measuring marginal cost
¾ Negotiated N ti t d
Transferred at the negotiation between manufacturing and distribution cost and consider of opportunity cost
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10/12/2009
Economics of Organization
Program Pascasarjana Ilmu Akuntansi Fakultas Ekonomi Universitas Indonesia
Conclusion Transfer between division should be by Market base because information of the intermediate goods (part) is provide provide. We do not have information about selling price of division with manufactured this part to become one product. And the selling price of the goods not reflected the opportunity cost. The Auto Auto-Fit Fit should produce the part with full capacity because the selling price to the division or external customer based on market price.
Economics of Organization
Program Pascasarjana Ilmu Akuntansi Fakultas Ekonomi Universitas Indonesia
Thank you
Review Question 17-1 Brickley, Smith, and Zimmerman, Managerial Economics and Organizational Architecture, 4th ed.
Presented By : • Ari Wardani • Jonathan HP.Babrayan Supported By : • Oktavia • Herni Kurniawati
0706306560 0906498295 0806479074 0806479055
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