i.ii.The Organic Bread Company (OBC) makes a range of breads for sale direct to the public. The productionprocess begins with workers weighing out ingredients on electronic scales and then placing them in amachine for mixing. A worker then manually removes the mix from the machine and shapes it into loavesby hand, after which the bread is then placed into the oven for baking.All baked loaves are then inspected by OBC's quality inspector before they are packaged up and madeready for sale. Any loaves which fail the inspection are donated to a local food bank.The standard cost card for OBC's 'Mixed Bloomer', one of its most popular loaves, is as follows:£White flour0.81Wholegrain flour0.330.20YeastTotal1.34Budgeted production of Mixed Bloomers was 1,000 units for the quarter, although actual productionwas only 950 units. The total actual quantities used and their actual costs were:White flourWholegrain flourYeastTotal45015010610grams at £1.80 per kggrams at £2.20 per kggrams at £20 per kggramsKg £ per kg1.92.120408.515210570.5a) Calculate the total material mix variance and the total material yield variance for OBC for the lastquarter.b) Using the information in the question, suggest THREE possible reasons why an ADVERSEMATERIAL YIELD variance could arise at OBC.Multinational organizations can use international transfer pricing to achieve multiple objectives. Bysetting a high transfer price in selling/ providing a good/service between subsidiaries/ divisions locatedin different countries, they can reduce the profitability of particular subsidiaries, thereby potentiallyreducing the demand for higher wages from staff employed there. Alternatively, by charging a lowtransfer price, they can enable a subsidiary to shift income from a country with high corporation tax ratesto a country with lower corporation tax rates. The effect of this latter objective is that some countrieswith lower corporation tax rates are benefitting at the expense of those countries with highercorporation tax rates. This has led to a proliferation of legal action against certain companies by particularcountries and, indeed, political institutions. For example, the European Commission initiated aninvestigation against Apple and the Republic of Ireland in 2014 in relation to how much corporation taxApple paid in that jurisdiction. One of the claims made by the Commission was that Ireland did not applyan appropriate transfer pricing arm's-length principle in calculating how much of Apple's profits could betaxed there. The Commission found against them and ordered Apple to pay Ireland €13 billion plusinterest. Both Apple and Ireland have appealed the decision. After many years of trying, The Organisationfor Economic Co-operation and Development (OECD) hopes to finalize an agreement among its membersin 2020, whereby all firms would pay tax wherever they have: (1) significant levels of consumer-facingactivities and (2) generate their profits. This should bring some much-needed clarity to this extremelycomplex area.What other objectives could be achieved by a subsidiary/ division charging a low transfer price?

Since there are 2 different questions in the image, as per policies we can solve only first one as…

i. The Organic Bread Company (OBC) makes a range of breads for sale direct to the public. The production process begins with workers weighing out ingredients on electronic scales and then placing them in a machine for mixing. A worker then manually removes the mix from the machine and shapes it into loaves by hand, after which the bread is then placed into the oven for baking. All baked loaves are then inspected by OBC's quality inspector before they are packaged up and made ready for sale. Any loaves which fail the inspection are donated to a local food bank. The sta rd for ORC's 'Mixed Pla fellows

i. The Organic Bread Company (OBC) makes a range of breads for sale direct to the public. The production process begins with workers weighing out ingredients on electronic scales and then placing them in a machine for mixing. A worker then manually removes the mix from the machine and shapes it into loaves by hand, after which the bread is then placed into the oven for baking. All baked loaves are then inspected by OBC's quality inspector before they are packaged up and made ready for sale. Any loaves which fail the inspection are donated to a local food bank. The sta rd for ORC's 'Mixed Pla fellows

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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