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SUMMIT ENTERPRISES

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The case involves the application of transfer pricing, divisional performance analysis, cost estimation, and cost-volume-profit analysis. The setting is a diversified corporation with one division requesting services from another division. The objective of the case is for students to think about appropriate transfer prices and the use of ROI for service-oriented divisions, as well as to have students provide solutions for break-even points, operating leverage, and high-low cost estimates. Students often have trouble seeing how seemingly disparate topics in cost/managerial accounting relate to one another and this case offers an illustration of how a variety of topics are woven into one scenario. [PUBLICATION ABSTRACT]

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