Exam 23: Decentralized Operations

Magnolia Company's Division A has income from operations of $80,000 and assets of $400,000. The minimum acceptable return on assets is 12%. What is the residual income for the division?

An activity base is used to charge service department expenses. Match each of the following activity bases with the appropriate department (a-h). -Number of payroll checks

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 Clydesdale Company's return on investment?

Xang Company's costs were over budget by $46,000. Xang Company is divided into two regions. The first region's costs were over budget by $7,000.​Determine the amount that the second region's costs were over or under budget.

The profit margin is the ratio of

Which of the following expenses incurred by a department store is an indirect expense?

Depreciation expense on store equipment for a department store is an indirect expense.

What is the profit margin for Division D?

The Central Division of Chemical Company has a return on investment of 22% and an investment turnover of 1.4. What is the profit margin?

Responsibility accounting reports for profit centers are normally in the form of income statements.

Use this information for Train Corporation to answer the questions that follow. ​ The following financial information was summarized from the accounting records of Train Corporation for the current year ended December 31: ​ -The income from operations for the Rails Division is

If income from operations for a division is $120,000, sales are $975,000, and invested assets are $750,000, the investment turnover is 1.3.

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: ​ -How much service department cost would be allocated to the Super Division?

Match each definition that follows with the term (a-e) it defines. -Income from operations minus minimum acceptable income from operations

The best measure of managerial efficiency in the use of investments in assets is

An activity base is used to charge service department expenses. Match each of the following activity bases with the appropriate department (a-h). -Number of employees

Several items are missing from the following table of return on investment and residual income. Determine the missing items, identifying each item by the appropriate letter (a-l). Round percentage values to one decimal place.​

Materials used by Layton Company's Division 1 are currently purchased from an outside supplier at $58 per unit. Division 2 is able to supply Division 1 with 22,000 units at a variable cost of $46 per unit. The two divisions have recently negotiated a transfer price of $50 per unit for the 20,000 units.? (a) By how much will each division's income increase as a result of this transfer? (b) What is the total increase in income for Layton?

Use this information for Train Corporation to answer the questions that follow. ​ The following financial information was summarized from the accounting records of Train Corporation for the current year ended December 31: ​ -The gross profit for the Locomotive Division is

What additional information is needed to calculate the return on investment if income from operations is known?