Question 1

Typically,investment centers are evaluated on the basis of __________________.

Accepted Answer

return on

Question 2

A transfer price is the price charged for a component by the selling division to the buying division of the same company.

Accepted Answer

A) True 
 B)False

Question 3

Pollux Company had the following income statement for last year:
   Beginning assets were $565,000 and ending assets were $597,000.
(Carry computations out to three decimal places.)

Accepted Answer

The answer of Pollux Company had the following income statement...

Question 4

The ________________ is a strategic management system that defines a strategic-based responsibility accounting system.

Accepted Answer

The answer of The ________________ is a strategic management system...

Question 5

Describe the four perspectives of the Balanced Scorecard.

Accepted Answer

The four perspectives of the Balanced Sc

Question 6

Figure 12-8
Bostonian Inc.has a number of divisions,including Delta Division and ListenNow Division.The ListenNow Division owns and operates a line of MP3 players.Each year the ListenNow Division purchases component AZ in order to manufacture the MP3 players.Currently it purchases this component from an outside supplier for $6.50 per component.The manager of the Delta Division has approached the manager of the ListenNow Division about selling component AZ to the ListenNow Division.The full product cost of component AZ is $3.10.The Delta Division can sell all of the components AZ it makes to outside companies for $6.50.The ListenNow Division needs 18,000 component AZs per year; the Delta Division can make up to 60,000 components per year.
Refer to Figure 12-8.

Accepted Answer

The answer of Figure 12-8
Bostonian Inc.has a number of divisions,including...

Question 7

Residual income is the difference between operating income and the product of the hurdle rate and the company's average operating assets.

Accepted Answer

A) True 
 B)False

Question 8

Figure 12-2. The manager of Stock Division projects the following for next year:
  The manager can invest in an additional project that would require $40,000 investment in additional assets and would generate $6,000 of additional income.The company's minimum rate of return is 14%.
Refer to Figure 12-2.What is the residual income for Stock Division without the additional investment?

Accepted Answer

A) $40,000 
B) $6,000 
C) $6,600 
D) $6,200 
E) $7,500 
A) $40,000 
B) $6,000 
C) $6,600 
D) $6,200 
E) $7,500

Question 9

Paige Inc.has a division that makes paint and another division that constructs subdivision houses.The paint division incurs the following costs for one gallon of paint:
   The Paint Division can make 1,000,000 gallons per year,and is at capacity.The Construction Division currently buys its paint from an outside supplier for $5.20 per gallon (the same price that the Paint Division receives).

Accepted Answer

The answer of Paige Inc.has a division that makes paint...

Question 10

When a product is transferred at market price,the transfer will optimize both divisional and company-wide profits.

Accepted Answer

A) True 
 B)False

Question 11

Figure 12-1. Dempsey Company provided the following information for last year:
  Refer to Figure 12-1.Dempsey's return on investment for last year was

Accepted Answer

A) 2.0. 
B) 0.21. 
C) 0.32. 
D) 0.50. 
E) 0.15. 
A) 2.0. 
B) 0.21. 
C) 0.32. 
D) 0.50. 
E) 0.15.

Question 12

The decision-making approach that allows managers at lower levels to make and implement key decisions pertaining to their areas of responsibility is

Accepted Answer

A) responsibility accounting. 
B) controllable accounting. 
C) decentralization. 
D) optimal strategic accounting. 
E) none of these. 
A) responsibility accounting. 
B) controllable accounting. 
C) decentralization. 
D) optimal strategic accounting. 
E) none of these.

Question 13

Transfer pricing is a complex issue.

Accepted Answer

A) True 
 B)False

Question 14

Turnover is calculated as

Accepted Answer

A) operating income/average operating assets. 
B) average operating assets/operating income. 
C) (beginning operating assets + ending operating assets)/2. 
D) sales/average operating assets. 
E) operating income/sales. 
A) operating income/average operating assets. 
B) average operating assets/operating income. 
C) (beginning operating assets + ending operating assets)/2. 
D) sales/average operating assets. 
E) operating income/sales.

Question 15

Paige Inc.has a division that makes paint and another division that constructs subdivisions.The paint division incurs the following costs for one gallon of paint:
   The Paint Division can make 1,000,000 gallons per year,and expects to produce 800,000 gallons next year.The Construction Division currently buys 200,000 gallons of paint from an outside supplier for $5.30 per gallon (the same price that the Paint Division receives).

Accepted Answer

The answer of Paige Inc.has a division that makes paint...

Question 16

If the operating asset turnover increased by 50 percent and the margin increased by 50 percent,the ROI would increase by

Accepted Answer

A) 50%. 
B) 25%. 
C) 100%. 
D) 125%. 
A) 50%. 
B) 25%. 
C) 100%. 
D) 125%.

Question 17

The difference between realization and sacrifice defines

Accepted Answer

A) target objectives. 
B) reliability. 
C) single-loop feedback. 
D) customer value. 
E) none of these. 
A) target objectives. 
B) reliability. 
C) single-loop feedback. 
D) customer value. 
E) none of these.

Question 18

Dixie Company has the following data for 2011:
   Dixie Company has a target ROI of 20 percent.
Required: Calculate the following amounts for each division:

Accepted Answer

Division A

Question 19

The difference between operating income and the minimum dollar return required on a company's operating assets is the _______________.

Accepted Answer

The answer of The difference between operating income and the...

Question 20

Figure 12-3. Grey Inc.has many divisions that are evaluated on the basis of ROI.One division,Centra,makes boxes.A second division,Mantra,makes chocolates and needs 80,000 boxes per year.Centra incurs the following costs for one box:
  Centra has capacity to make 700,000 boxes per year.Mantra currently buys its boxes from an outside supplier for $1.80 each (the same price that Centra receives).
Refer to Figure 12-3.Assume that Grey Inc.allows division managers to negotiate transfer price.Centra is producing 600,000 boxes.If Centra and Mantra agree to transfer boxes,what is the floor of the bargaining range and which division sets it?

Accepted Answer

A) $1.80; Centra 
B) $1.48; Centra 
C) $1.48; Mantra 
D) $1.35; Mantra 
E) $1.35; Centra 
A) $1.80; Centra 
B) $1.48; Centra 
C) $1.48; Mantra 
D) $1.35; Mantra 
E) $1.35; Centra

Typically,investment centers are evaluated on the basis of __________________.

A transfer price is the price charged for a component by the selling division to the buying division of the same company.

Pollux Company had the following income statement for last year: Beginning assets were $565,000 and ending assets were $597,000. (Carry computations out to three decimal places.)

The ________________ is a strategic management system that defines a strategic-based responsibility accounting system.

Describe the four perspectives of the Balanced Scorecard.

Residual income is the difference between operating income and the product of the hurdle rate and the company's average operating assets.

When a product is transferred at market price,the transfer will optimize both divisional and company-wide profits.

Figure 12-1. Dempsey Company provided the following information for last year: Refer to Figure 12-1.Dempsey's return on investment for last year was

The decision-making approach that allows managers at lower levels to make and implement key decisions pertaining to their areas of responsibility is

Transfer pricing is a complex issue.

Turnover is calculated as

If the operating asset turnover increased by 50 percent and the margin increased by 50 percent,the ROI would increase by

The difference between realization and sacrifice defines

Dixie Company has the following data for 2011: Dixie Company has a target ROI of 20 percent. Required: Calculate the following amounts for each division:

The difference between operating income and the minimum dollar return required on a company's operating assets is the _______________.

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing,and Inventory Management

Profit Planning

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 12: Performance Evaluation and Decentralization

Typically,investment centers are evaluated on the basis of __________________.

A transfer price is the price charged for a component by the selling division to the buying division of the same company.

Pollux Company had the following income statement for last year: Beginning assets were $565,000 and ending assets were $597,000. (Carry computations out to three decimal places.)

The ________________ is a strategic management system that defines a strategic-based responsibility accounting system.

Describe the four perspectives of the Balanced Scorecard.

Residual income is the difference between operating income and the product of the hurdle rate and the company's average operating assets.

When a product is transferred at market price,the transfer will optimize both divisional and company-wide profits.

Figure 12-1. Dempsey Company provided the following information for last year: Refer to Figure 12-1.Dempsey's return on investment for last year was

The decision-making approach that allows managers at lower levels to make and implement key decisions pertaining to their areas of responsibility is

Transfer pricing is a complex issue.

Turnover is calculated as

If the operating asset turnover increased by 50 percent and the margin increased by 50 percent,the ROI would increase by

The difference between realization and sacrifice defines

Dixie Company has the following data for 2011: Dixie Company has a target ROI of 20 percent. Required: Calculate the following amounts for each division:

The difference between operating income and the minimum dollar return required on a company's operating assets is the _______________.

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing,and Inventory Management

Profit Planning

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Financial Statement Analysis

Filters