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Financial and Managerial Accounting: The Basis for Business Decisions, 12/e
Jan R. Williams, University of Tennessee
Susan F. Haka, Michigan State University
Mark S. Bettner, Bucknell University
Robert F. Meigs

Responsibility Accounting and Transfer Pricing

Tootsie Roll Exercises

 

TOOTSIE ROLL EXERCISE

EXERCISE 21.4

Tootsie Roll Industries' Unit

LO 1, 4, 6

 

Look at footnote 11 in Tootsie Roll Industries' annual report in Appendix A. The footnote details segments of Tootsie Roll's business. Answer the following questions based on the information in footnote 11:

  1. What are the segments presented by Tootsie Roll? Are these segments likely to be cost, profit, or investment centers? Explain your answers.
  2. What is the dollar amount of sales that are transferred between the segments in 1999? Are transfers increasing or decreasing between 1998 and 1999? Speculate about why the transfers between segments might increase or decrease.