Question 1

The manager of the Furniture Department of a leading retailer does not control the salaries of departmental personnel.

Accepted Answer

A) True 
 B)False

Question 2

How much will Jefferson's total income from operations increase?

Accepted Answer

A)  $37,500 
B)  $100,000 
C)  $62,500 
D)  $150,000 
A)  $37,500 
B)  $100,000 
C)  $62,500 
D)  $150,000

Question 3

Assume that divisional income from operations amounts to $215,000, and top management has established 15% as the minimum return on divisional assets totaling $1,000,000. The residual income for the division is

Accepted Answer

A)  $65,000 
B)  $215,000 
C)  $635,000 
D)  $150,000 
A)  $65,000 
B)  $215,000 
C)  $635,000 
D)  $150,000

Question 4

The minimum acceptable divisional income from operations is set by top management by establishing a minimum return considered acceptable for invested assets.

Accepted Answer

A) True 
 B)False

Question 5

If divisional income from operations is $100,000, invested assets are $850,000, and the minimum return on invested assets is 8%, the residual income is $68,000.

Accepted Answer

A) True 
 B)False

Question 6

The DuPont formula uses financial and nonfinancial information to measure the performance of a business.

Accepted Answer

A) True 
 B)False

Question 7

The profit margin for the Central Division of a company is 20%, and the investment turnover is 2.8. What is the return on investment for the Central Division?

Accepted Answer

A)  20% 
B)  7.1% 
C)  14% 
D)  56% 
A)  20% 
B)  7.1% 
C)  14% 
D)  56%

Question 8

The following data are taken from the management accounting reports of Dulcimer Co.:​   If an incentive bonus is paid to the manager who achieved the highest income from operations before service department charges, it follows that

Accepted Answer

A)  Division A's manager is given the bonus 
B)  Division B's manager is given the bonus 
C)  Division C's manager is given the bonus 
D)  Division B's and Division C's managers divide the bonus 
A)  Division A's manager is given the bonus 
B)  Division B's manager is given the bonus 
C)  Division C's manager is given the bonus 
D)  Division B's and Division C's managers divide the bonus

Question 9

Which of the following is not a disadvantage of a decentralized operation?

Accepted Answer

A)  competition among managers 
B)  duplication of operations 
C)  price cutting by departments that are competing in the same product market 
D)  top management freed from everyday tasks to do strategic planning 
A)  competition among managers 
B)  duplication of operations 
C)  price cutting by departments that are competing in the same product market 
D)  top management freed from everyday tasks to do strategic planning

Question 10

The budget for Department 6 of Cardinal Company for the current month ending March 31 is as follows:​   ​During March, the costs incurred in Department 6 of Cardinal Company were materials, $204,000; factory wages, $285,000; supervisory salaries, $63,600; depreciation of plant and equipment, $35,000; power and light, $21,360; insurance and property taxes, $14,400; maintenance, $9,456.
(a)Prepare a budget performance report for the supervisor of Department 6 of Cardinal Company for the month of March.
(b)Are there any significant variances 
(5% or greater) of the budgeted amounts that should be examined by the supervisor?

Accepted Answer

​​ @#IMG-DLM& (b)The factory wages, supe

Question 11

In an investment center, the manager has the responsibility and the authority to make decisions that affect not only costs and revenues, but also the plant assets invested in the center.

Accepted Answer

A) True 
 B)False

Question 12

Use this information for ABC Corporation to answer the questions that follow.
​
ABC Corporation has three service departments with the following costs and activity base:
​
   ABC has three operating divisions, Micro, Macro and Super. Their revenue, cost and activity information is as follows:
​
  
-The investment turnover for Chicks is

Accepted Answer

A)  1.3 
B)  1.5 
C)  1.0 
D)  1.1 
A)  1.3 
B)  1.5 
C)  1.0 
D)  1.1

Question 13

Which of the following is the best example of a decentralized operation?

Accepted Answer

A)  one owner who prepares, plans, and makes decisions for the entire company 
B)  each unit is responsible for its own operations and decision making 
C)  in a major company, operating decisions are made by top management 
D)  None of these choices 
A)  one owner who prepares, plans, and makes decisions for the entire company 
B)  each unit is responsible for its own operations and decision making 
C)  in a major company, operating decisions are made by top management 
D)  None of these choices

Question 14

Responsibility accounting reports for profit centers will include

Accepted Answer

A)  costs only 
B)  revenues only 
C)  expenses and fixed assets 
D)  revenues, expenses, and net income or loss from operations 
A)  costs only 
B)  revenues only 
C)  expenses and fixed assets 
D)  revenues, expenses, and net income or loss from operations

Question 15

Use this information for ABC Corporation to answer the questions that follow.
​
ABC Corporation has three service departments with the following costs and activity base:
​
   ABC has three operating divisions, Micro, Macro and Super. Their revenue, cost and activity information is as follows:
​
  
-What is the service department charge rate for the Personnel Department?

Accepted Answer

A)  $2,758 
B)  $3,200 
C)  $3,077 
D)  $1,000 
A)  $2,758 
B)  $3,200 
C)  $3,077 
D)  $1,000

Question 16

The balanced scorecard measures four areas of financial and nonfinancial performance of a business. Identify one of the following that is not included as a performance measurement.

Accepted Answer

A)  internal process 
B)  financial 
C)  innovation and learning 
D)  employees 
A)  internal process 
B)  financial 
C)  innovation and learning 
D)  employees

Question 17

A responsibility center in which the department manager has responsibility for and authority over costs and revenues is called a (n)

Accepted Answer

A)  profit center 
B)  investment center 
C)  volume center 
D)  cost center 
A)  profit center 
B)  investment center 
C)  volume center 
D)  cost center

Question 18

Use this information for ABC Corporation to answer the questions that follow.
​
ABC Corporation has three service departments with the following costs and activity base:
​
   ABC has three operating divisions, Micro, Macro and Super. Their revenue, cost and activity information is as follows:
​
  
-What is the service department charge rate for Graphics Production?

Accepted Answer

A)  $2 
B)  $10 
C)  $6.66 
D)  $0.50 
A)  $2 
B)  $10 
C)  $6.66 
D)  $0.50

Question 19

Use this information for ABC Corporation to answer the questions that follow.
​
ABC Corporation has three service departments with the following costs and activity base:
​
   ABC has three operating divisions, Micro, Macro and Super. Their revenue, cost and activity information is as follows:
​
  
-The profit margin for Chicks is

Accepted Answer

A)  25% 
B)  22% 
C)  15% 
D)  27.5% 
A)  25% 
B)  22% 
C)  15% 
D)  27.5%

Question 20

How much will Division 6's income from operations increase?

Accepted Answer

A)  $8,000 
B)  $15,000 
C)  $80,000 
D)  $150,000 
A)  $8,000 
B)  $15,000 
C)  $80,000 
D)  $150,000

The manager of the Furniture Department of a leading retailer does not control the salaries of departmental personnel.

How much will Jefferson's total income from operations increase?

Assume that divisional income from operations amounts to $215,000, and top management has established 15% as the minimum return on divisional assets totaling $1,000,000. The residual income for the division is

The minimum acceptable divisional income from operations is set by top management by establishing a minimum return considered acceptable for invested assets.

If divisional income from operations is $100,000, invested assets are $850,000, and the minimum return on invested assets is 8%, the residual income is $68,000.

The DuPont formula uses financial and nonfinancial information to measure the performance of a business.

The profit margin for the Central Division of a company is 20%, and the investment turnover is 2.8. What is the return on investment for the Central Division?

The following data are taken from the management accounting reports of Dulcimer Co.: If an incentive bonus is paid to the manager who achieved the highest income from operations before service department charges, it follows that

Which of the following is not a disadvantage of a decentralized operation?

In an investment center, the manager has the responsibility and the authority to make decisions that affect not only costs and revenues, but also the plant assets invested in the center.

Which of the following is the best example of a decentralized operation?

Responsibility accounting reports for profit centers will include

The balanced scorecard measures four areas of financial and nonfinancial performance of a business. Identify one of the following that is not included as a performance measurement.

A responsibility center in which the department manager has responsibility for and authority over costs and revenues is called a (n)

How much will Division 6's income from operations increase?

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Cost-Volume-Profit Analysis

Evaluating Variances From Standard Costs

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Filters

Exam 23: Decentralized Operations

The manager of the Furniture Department of a leading retailer does not control the salaries of departmental personnel.

How much will Jefferson's total income from operations increase?

Assume that divisional income from operations amounts to $215,000, and top management has established 15% as the minimum return on divisional assets totaling $1,000,000. The residual income for the division is

The minimum acceptable divisional income from operations is set by top management by establishing a minimum return considered acceptable for invested assets.

If divisional income from operations is $100,000, invested assets are $850,000, and the minimum return on invested assets is 8%, the residual income is $68,000.

The DuPont formula uses financial and nonfinancial information to measure the performance of a business.

The profit margin for the Central Division of a company is 20%, and the investment turnover is 2.8. What is the return on investment for the Central Division?

The following data are taken from the management accounting reports of Dulcimer Co.:​ If an incentive bonus is paid to the manager who achieved the highest income from operations before service department charges, it follows that

Which of the following is not a disadvantage of a decentralized operation?

In an investment center, the manager has the responsibility and the authority to make decisions that affect not only costs and revenues, but also the plant assets invested in the center.

Which of the following is the best example of a decentralized operation?

Responsibility accounting reports for profit centers will include

The balanced scorecard measures four areas of financial and nonfinancial performance of a business. Identify one of the following that is not included as a performance measurement.

A responsibility center in which the department manager has responsibility for and authority over costs and revenues is called a (n)

How much will Division 6's income from operations increase?

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Cost-Volume-Profit Analysis

Evaluating Variances From Standard Costs

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Filters

The following data are taken from the management accounting reports of Dulcimer Co.: If an incentive bonus is paid to the manager who achieved the highest income from operations before service department charges, it follows that