Session Syllabus EMBA 512 – Assessing Business Opportunities Session Session Session Date # Time Thurs. Nov. 15, 10 AM 2012 Primary Instructor Name Frank Ilett Session Title Instructor(s) Internal Performance Measurement: ABC Costing and Transfer Pricing Module Frank Ilett Phone 208.426.2568 Email [email protected] Learning Objective: Activity Based Costing (ABC): Activity Based Costing (ABC) is an alternative way of assigning costs to products or cost objectives. It focuses on the way in which each objective uses the various overhead pools versus the traditional approach that uses a single overhead driver. ABC costing applies to manufacturing, service industries and governmental units alike. The manner in which costs are allocated can have a significant impact on the way managers evaluate operating results. This portion of the course will acquaint students with implementing systems, using and interpreting cost information in an ABC environment. Transfer Pricing: Most enterprises have the opportunity to sell their products or services to other members of their corporate family. This requires establishing an interdivision pricing structure that is fair and equitable to all parties. This issue is complicated even more where it involves divisions that reside in different nations that have varying taxing structures. In this portion of the module, students will be acquainted with transfer pricing methods and their impact on performance measurement. Advanced Preparation: Reading(s): Accounting for Decision Making and Control, 7th edition, Jerold Zimmerman. Chapter 5 Chapter 11 Day of Session: Assignment(s): None! Post Session: Assignment(s): Assign. Description Date # Due 10.0 10.1 Transfer Pricing Case Analysis ABC Cost Case Analysis Time Due Submittal Individual Grading Method / Group Instructor Points Assign. Weight 11-27-11 5:00 (PM) Email Individual Ilett 50 n/a 11-27-11 5:00 (PM) Email Individual Ilett 50 n/a Assignment Details: Assignment 10.0 - Problem 5-3 from the text. Each student needs to prepare an analysis using excel and write a paragraph explaining the conclusions they reached based on the calculations. - Problem 5-9 from the text. Using the information in the problem determine a possible equitable transfer price based on the information provided. Write a short paragraph explaining your conclusions. Assignment 10.1 - Problem 11-9 from the text. Prepare a worksheet that reflects the operating income statements of the departments using the ABC approach. Prepare a short memo to me explaining why this method is better than the traditional method. Also, address any pit falls you may see.