Question 1

The original cost of an asset before deducting accumulated depreciation

Accepted Answer

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

Question 2

is the result of the calculation which divides income by revenue.

Accepted Answer

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

Question 3

When a company measures performance using residual income, managers tend to invest in any project earning more than the cost of capital and thus raise the firm's total profits.

Accepted Answer

A) True 
 B)False

Question 4

What a firm must pay to acquire more capital, whether or not it actually has to acquire more capital to take on a project

Accepted Answer

The answer of What a firm must pay to acquire...

Question 5

The amount charged by one segment of an organization for a product or service that it supplies to another segment of the same organization

Accepted Answer

The answer of The amount charged by one segment of...

Question 6

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

Accepted Answer

A)  6.25% 
B)  62.50% 
C)  10.00% 
D)  None of these answers is correct. 
A)  6.25% 
B)  62.50% 
C)  10.00% 
D)  None of these answers is correct.

Question 7

A management by objectives approach stresses budgeted results.

Accepted Answer

A) True 
 B)False

Question 8

In designing accounting control systems, top managers must consider the system's impact on behavior desired by the organization.

Accepted Answer

A) True 
 B)False

Question 9

There are really no advantages to a centralized company.

Accepted Answer

A) True 
 B)False

Question 10

In agency theory, risk is:

Accepted Answer

A)  the relationship between cost and perceived benefit 
B)  the probability that a desired outcome may not be achieved 
C)  the possibility that performance will be measured incorrectly 
D)  the influence of uncontrollable factors on a manager's performance 
A)  the relationship between cost and perceived benefit 
B)  the probability that a desired outcome may not be achieved 
C)  the possibility that performance will be measured incorrectly 
D)  the influence of uncontrollable factors on a manager's performance

Question 11

The rate of return on gross book value will not change if operating income remains constant.

Accepted Answer

A) True 
 B)False

Question 12

The following information pertains to Webster Company: Property, plant and $\begin{array}{rrrr}
\text { Currentassets } & \$ 100,000 & \text { Currentliabilities } & \$ 75,000 \
\text { equipment } & 150,000 & \text { Long term liabilities } & 100,000\
\text { Constructioninprogress } &50,000&\text { Stockholders'equity }&125,000\
\text { Total assets }&\$300,000&\text { Total equities }&\$300,000
\end{array}$ Invested capital is if it is defined as total assets less current liabilities.

Accepted Answer

A)  $100,000 
B)  $225,000 
C)  $250,000 
D)  $300,000 
A)  $100,000 
B)  $225,000 
C)  $250,000 
D)  $300,000

Question 13

Return on sales can be increased by increasing expenses.

Accepted Answer

A) True 
 B)False

Question 14

Low transfer prices generally lead to low import duties.

Accepted Answer

A) True 
 B)False

Question 15

The maximum contribution to profit that the selling segment forgoes by transferring the item internally

Accepted Answer

The answer of The maximum contribution to profit that the...

Question 16

The costs of accumulating and processing information frequently decline under centralization.

Accepted Answer

A) True 
 B)False

Question 17

The following information is available for the Leno Company: $\begin{array}{ll}
\text { Sales } & \$ 1,000,000 \
\text { Invested capital } & 312,500 \
\text { ROI } & 10 \%
\end{array}$ The net income is:

Accepted Answer

A)  $31,250 
B)  $312,500 
C)  $100,000 
D)  $687,500 
A)  $31,250 
B)  $312,500 
C)  $100,000 
D)  $687,500

Question 18

Managers in decentralized units may waste time negotiating with other units about goods or services one unit provides to the other.

Accepted Answer

A) True 
 B)False

Question 19

Angelo Company's revenues are $300 on invested capital of $240. Expenses are currently 85% of sales. If Angelo Company can reduce its invested capital by 20%, return on investment will be:

Accepted Answer

A)  23.44% 
B)  75% 
C)  93.75% 
D)  18.75% 
A)  23.44% 
B)  75% 
C)  93.75% 
D)  18.75%

Question 20

The additional amount the selling segment must pay to produce and transfer a product or service to another segment

Accepted Answer

The answer of The additional amount the selling segment must...

The original cost of an asset before deducting accumulated depreciation

is the result of the calculation which divides income by revenue.

When a company measures performance using residual income, managers tend to invest in any project earning more than the cost of capital and thus raise the firm's total profits.

What a firm must pay to acquire more capital, whether or not it actually has to acquire more capital to take on a project

The amount charged by one segment of an organization for a product or service that it supplies to another segment of the same organization

The following information is available for the Hodge Podge Company: Sales \ 250,000 Invested capital 156,250 ROI 10\% The return on sales is:

A management by objectives approach stresses budgeted results.

In designing accounting control systems, top managers must consider the system's impact on behavior desired by the organization.

There are really no advantages to a centralized company.

In agency theory, risk is:

The rate of return on gross book value will not change if operating income remains constant.

Return on sales can be increased by increasing expenses.

Low transfer prices generally lead to low import duties.

The maximum contribution to profit that the selling segment forgoes by transferring the item internally

The costs of accumulating and processing information frequently decline under centralization.

The following information is available for the Leno Company: Sales \ 1,000,000 Invested capital 312,500 ROI 10\% The net income is:

Managers in decentralized units may waste time negotiating with other units about goods or services one unit provides to the other.

Angelo Company's revenues are $300 on invested capital of $240. Expenses are currently 85% of sales. If Angelo Company can reduce its invested capital by 20%, return on investment will be:

The additional amount the selling segment must pay to produce and transfer a product or service to another segment

Managerial Accounting and the Business Organization

Introduction to Cost Behavior and Cost Volume Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information and Decision-Making: Marketing Decisions

Relevant Information and Decision-Making: Product Decisions

The Master Budget

Flexible Budget and Variance Analysis

Management Control Systems and Responsibility Accounting

Capital Budgeting

Cost Allocation

Job-Costing

Process-Costing Systems

Overhead Application: Variable and Absorbtion Costing

Basic Accounting Concepts, Techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Filters

Exam 10: Management Control in Decentralized Organizations

The original cost of an asset before deducting accumulated depreciation

is the result of the calculation which divides income by revenue.

When a company measures performance using residual income, managers tend to invest in any project earning more than the cost of capital and thus raise the firm's total profits.

What a firm must pay to acquire more capital, whether or not it actually has to acquire more capital to take on a project

The amount charged by one segment of an organization for a product or service that it supplies to another segment of the same organization

The following information is available for the Hodge Podge Company: Sales \ 250,000 Invested capital 156,250 ROI 10\% The return on sales is:

A management by objectives approach stresses budgeted results.

In designing accounting control systems, top managers must consider the system's impact on behavior desired by the organization.

There are really no advantages to a centralized company.

In agency theory, risk is:

The rate of return on gross book value will not change if operating income remains constant.

Return on sales can be increased by increasing expenses.

Low transfer prices generally lead to low import duties.

The maximum contribution to profit that the selling segment forgoes by transferring the item internally

The costs of accumulating and processing information frequently decline under centralization.

The following information is available for the Leno Company: Sales \ 1,000,000 Invested capital 312,500 ROI 10\% The net income is:

Managers in decentralized units may waste time negotiating with other units about goods or services one unit provides to the other.

Angelo Company's revenues are $300 on invested capital of $240. Expenses are currently 85% of sales. If Angelo Company can reduce its invested capital by 20%, return on investment will be:

The additional amount the selling segment must pay to produce and transfer a product or service to another segment

Managerial Accounting and the Business Organization

Introduction to Cost Behavior and Cost Volume Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information and Decision-Making: Marketing Decisions

Relevant Information and Decision-Making: Product Decisions

The Master Budget

Flexible Budget and Variance Analysis

Management Control Systems and Responsibility Accounting

Capital Budgeting

Cost Allocation

Job-Costing

Process-Costing Systems

Overhead Application: Variable and Absorbtion Costing

Basic Accounting Concepts, Techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Filters