Question 1

ROI = income or profit) / investment.

Accepted Answer

A) True 
 B)False

Question 2

In measuring income, either the net book value or the gross book value can be used.

Accepted Answer

A) True 
 B)False

Question 3

There are really no advantages to a centralized company.

Accepted Answer

A) True 
 B)False

Question 4

The following information is available for the Super Company: $$\begin{array} { l r } 
\text { Sales } & \$ 1,000,000 \
\text { Invested capital } & 312,500 \
\text { ROI } & 20 \%
\end{array}$$ The net income is _____.

Accepted Answer

A) $687,500 
B) $312,500 
C) $62,500 
D) $100,000 
A) $687,500 
B) $312,500 
C) $62,500 
D) $100,000

Question 5

The original cost of an asset before deducting accumulated depreciation

Accepted Answer

The answer of The original cost of an asset before...

Question 6

The following information pertains to Patterson Company: $\begin{array}{llll}
\text { Current assets } & \$ 200,000 & \text { Current liabilities } & \$ 100,000 \
\text { Property, plant and } & &\
\text { equipment } & 350,000 & \text { Long-term liabilities } & 200,000 \
\text { Construction in progress } & 100,000 & \text { Stockholders' equity } & 350,000\
\text { Total assets }&\$650,000&\text { Total assets }&\$650,000
\end{array}$ Invested capital is _____ if it is defined as stockholders' equity.

Accepted Answer

A) $650,000 
B) $600,000 
C) $550,000 
D) $350,000 
A) $650,000 
B) $600,000 
C) $550,000 
D) $350,000

Question 7

Decentralization is most successful when an organization's segments are relatively independent of one another.

Accepted Answer

A) True 
 B)False

Question 8

Jewel Company's revenues are $300 and invested capital is $240.Expenses are currently 60% of sales.Jewel Company's current return on investment is _____.

Accepted Answer

A) 50% 
B) 100% 
C) 80% 
D) none of these answers is correct 
A) 50% 
B) 100% 
C) 80% 
D) none of these answers is correct

Question 9

_____ is the result of the calculation that divides income by revenue.

Accepted Answer

A) Return on sales 
B) Residual income 
C) Capital turnover 
D) Return on investment 
A) Return on sales 
B) Residual income 
C) Capital turnover 
D) Return on investment

Question 10

Dysfunctional behavior is action taken in conflict with organizational goals.

Accepted Answer

A) True 
 B)False

Question 11

In agency theory, incentive is the _____.

Accepted Answer

A) influence of uncontrollable factors on a manager's performance 
B) extent to which a manager's reward depends on a performance measure 
C) relationship between cost and perceived benefit 
D) relationship between goal congruence and managerial effort 
A) influence of uncontrollable factors on a manager's performance 
B) extent to which a manager's reward depends on a performance measure 
C) relationship between cost and perceived benefit 
D) relationship between goal congruence and managerial effort

Question 12

Low transfer prices generally lead to low import duties.

Accepted Answer

A) True 
 B)False

Question 13

The following information is available for the Peter Company: $$\begin{array} { l r } 
\text { Sales } & \$ 150,000 \
\text { Invested capital } & 156,250 \
\text { ROI } & 10 \%
\end{array}$$ The return on sales is _____.

Accepted Answer

A) 10.00% 
B) 10.42% 
C) 62.50% 
D) none of these answers is correct 
A) 10.00% 
B) 10.42% 
C) 62.50% 
D) none of these answers is correct

Question 14

United States' multinational companies must use a transfer price that one division would pay another if they were independent companies.

Accepted Answer

A) True 
 B)False

Question 15

Julio Company's after-tax operating income was $882 million.Total assets were $5,900 million and stockholder's equity was $4,050 million.Julio Company's cost of capital was 10%.Julio Company's EVA was _____.

Accepted Answer

A) $292 million 
B) $597 million 
C) $667 million 
D) $187 million 
A) $292 million 
B) $597 million 
C) $667 million 
D) $187 million

Question 16

Generally, the transfer price = outlay cost + opportunity cost.

Accepted Answer

A) True 
 B)False

Question 17

The Table and Chair Divisions are part of the same company.Currently the Chair Division buys a part from Table for $384.The Table Division wants to increase the price of the part it sells to Chair by $96 to $480.The manager of Chair has stated that it cannot afford to go that high, as it will decrease the division's profit to near zero.Chair can buy the part from an outside supplier for $448.The cost data for the Table Division is as follows: $$\begin{array} { l r } 
\text { Direct materials } & \$ 136 \
\text { Direct labor } & 200 \
\text { Variable overhead } & 40 \
\text { Fixed overhead } & 42
\end{array}$$ If Table ceases to produce the parts for Chair, it will be able to avoid one?third of the fixed manufacturing overhead.The Table Division has excess capacity but no alternative uses for its facilities.From the standpoint of the company as a whole, should Chair continue to buy from Table or start to buy from the outside supplier?

Accepted Answer

A) Chair should buy from Table Division because the company's profit would be $58.00 per unit larger. 
B) Chair should buy from Table Division because the company's profit would be $32.00 per unit larger. 
C) Chair should buy from an outside supplier. 
D) None of these answers is correct. 
A) Chair should buy from Table Division because the company's profit would be $58.00 per unit larger. 
B) Chair should buy from Table Division because the company's profit would be $32.00 per unit larger. 
C) Chair should buy from an outside supplier. 
D) None of these answers is correct.

Question 18

An improvement in either capital turnover or return on sales, without changing the other, will also improve the _____.

Accepted Answer

A) level of sales 
B) cost of capital 
C) net book value 
D) rate of return on invested capital 
A) level of sales 
B) cost of capital 
C) net book value 
D) rate of return on invested capital

Question 19

It is recommended that budgeted or standard costs be used instead of actual costs for cost-based transfer prices.

Accepted Answer

A) True 
 B)False

Question 20

Sandler Company makes internal transfers at 180% of full cost.The Soda Refining division purchases 30,000 containers of carbonated water per day, on average, from a local supplier who delivers the water for $32 per container via an external shipper.To reduce costs, the company located an indepen?dent producer in Ohio who is willing to sell 30,000 containers at $20 each, delivered to Sandler Company's shipping division in Ohio.The company's Shipping Division in Ohio has excess capacity and can ship the 30,000 containers at a variable cost of $2.50 per container._____ is the total cost to Sandler Company if the carbonated water is purchased from the local supplier.

Accepted Answer

A) $960,000 
B) $1,200,000 
C) $1,501,000 
D) $1,620,000 
A) $960,000 
B) $1,200,000 
C) $1,501,000 
D) $1,620,000

ROI = income or profit) / investment.

In measuring income, either the net book value or the gross book value can be used.

There are really no advantages to a centralized company.

The following information is available for the Super Company: Sales \ 1,000,000 Invested capital 312,500 ROI 20\% The net income is _____.

The original cost of an asset before deducting accumulated depreciation

Decentralization is most successful when an organization's segments are relatively independent of one another.

Jewel Company's revenues are $300 and invested capital is $240.Expenses are currently 60% of sales.Jewel Company's current return on investment is _____.

_____ is the result of the calculation that divides income by revenue.

Dysfunctional behavior is action taken in conflict with organizational goals.

In agency theory, incentive is the _____.

Low transfer prices generally lead to low import duties.

The following information is available for the Peter Company: Sales \ 150,000 Invested capital 156,250 ROI 10\% The return on sales is _____.

United States' multinational companies must use a transfer price that one division would pay another if they were independent companies.

Julio Company's after-tax operating income was $882 million.Total assets were $5,900 million and stockholder's equity was $4,050 million.Julio Company's cost of capital was 10%.Julio Company's EVA was _____.

Generally, the transfer price = outlay cost + opportunity cost.

An improvement in either capital turnover or return on sales, without changing the other, will also improve the _____.

It is recommended that budgeted or standard costs be used instead of actual costs for cost-based transfer prices.

Managerial Accounting, the Business Organization, and Professional Ethics

Introduction to Cost Behavior and Cost-Volume Relationships

Measurement of Cost Behavior

Cost Management Systems and an Introduction to Activity-Based Costing

Relevant Information and Decision Making With a Focus on Pricing Decisions

Relevant Information and Decision Making: Operational Decisions

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Costing and Process-Costing Systems

Basic Accounting: Concepts, Techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

Filters

Exam 10: Management Control in Decentralized Organizations

ROI = income or profit) / investment.

In measuring income, either the net book value or the gross book value can be used.

There are really no advantages to a centralized company.

The following information is available for the Super Company: Sales \ 1,000,000 Invested capital 312,500 ROI 20\% The net income is _____.

The original cost of an asset before deducting accumulated depreciation

Decentralization is most successful when an organization's segments are relatively independent of one another.

Jewel Company's revenues are $300 and invested capital is $240.Expenses are currently 60% of sales.Jewel Company's current return on investment is _____.

_____ is the result of the calculation that divides income by revenue.

Dysfunctional behavior is action taken in conflict with organizational goals.

In agency theory, incentive is the _____.

Low transfer prices generally lead to low import duties.

The following information is available for the Peter Company: Sales \ 150,000 Invested capital 156,250 ROI 10\% The return on sales is _____.

United States' multinational companies must use a transfer price that one division would pay another if they were independent companies.

Julio Company's after-tax operating income was $882 million.Total assets were $5,900 million and stockholder's equity was $4,050 million.Julio Company's cost of capital was 10%.Julio Company's EVA was _____.

Generally, the transfer price = outlay cost + opportunity cost.

An improvement in either capital turnover or return on sales, without changing the other, will also improve the _____.

It is recommended that budgeted or standard costs be used instead of actual costs for cost-based transfer prices.

Managerial Accounting, the Business Organization, and Professional Ethics

Introduction to Cost Behavior and Cost-Volume Relationships

Measurement of Cost Behavior

Cost Management Systems and an Introduction to Activity-Based Costing

Relevant Information and Decision Making With a Focus on Pricing Decisions

Relevant Information and Decision Making: Operational Decisions

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Costing and Process-Costing Systems

Basic Accounting: Concepts, Techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

Filters