Please use this identifier to cite or link to this item:
https://www.um.edu.mt/library/oar/handle/123456789/63856
Title: | Activity-based costing as a basis for transfer prices and target setting |
Authors: | Lueg, Rainer |
Keywords: | Activity-based costing Transfer pricing Incentives in industry Stockholder wealth Consumer satisfaction |
Issue Date: | 2020 |
Publisher: | Eleftherios Thalassinos |
Citation: | Lueg, R. (2020). Activity-based costing as a basis for transfer prices and target setting. International Journal of Economics and Business Administration, 8(3), 489-499. |
Abstract: | Purpose: The article deals with a division of a large electronics company. The division intends to improve its product profitability using Time-driven Activity-based Costing. It also aims at aligning the incentives of executives by setting feasible transfer prices and motivating targets. Design/Methodology/Approach: The article illustrates how variance analysis and Activity-based Costing help managers to understand the different profitability of products better. Findings: The case study can serve both as a discussion basis in class as well as an exam for students in management, operations, and accounting. Practical Implications: Students will need to reflect on how a mechanical application of incentive systems can lead to dysfunctional decisions that run counter to a company’s business model. Originality/Value: The open questions at the end of the article serve the purpose of raising students’ awareness of the limits of cash-based incentive systems. |
URI: | https://www.um.edu.mt/library/oar/handle/123456789/63856 |
Appears in Collections: | IJEBA, Volume 8, Issue 3 |
Files in This Item:
File | Description | Size | Format | |
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Activity-based_costing_as_a_basis_for_transfer_prices_and_target_setting_2020.pdf | 285.01 kB | Adobe PDF | View/Open |
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