Question 1

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

Accepted Answer

The answer of A _________________ is the price charged for...

Question 2

Figure 12-5.
The following information pertains to the three divisions of Yang Company:
  
-Refer to Figure 12-5. What are the average operating assets for Division B?

Accepted Answer

A)  $125,000 
B)  $120,000 
C)  $18,000 
D)  $420,000 
A)  $125,000 
B)  $120,000 
C)  $18,000 
D)  $420,000

Question 3

Chase Company had the following income statement for last year:
   Beginning assets were $279,500 and ending assets were $296,500.

Accepted Answer

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

Question 4

A key feature of economic value added (EVA) is that it emphasizes after-tax operating income and the actual cost of capital.

Accepted Answer

A) True 
 B)False

Question 5

Provide the missing data in the following situations:

Accepted Answer

The answer of Provide the missing data in the following...

Question 6

Beta Division had the following information:   If the asset base is decreased by $100,000, with no other changes, the return on investment of Beta Division will be

Accepted Answer

A)  100.0%. 
B)  16.7%. 
C)  600.0%. 
D)  62.5%. 
A)  100.0%. 
B)  16.7%. 
C)  600.0%. 
D)  62.5%.

Question 7

___________________ is after tax operating income minus the dollar cost of capital employed.

Accepted Answer

Economic v

Question 8

________________ decision making allows managers at lower levels to make and implement key decisions pertaining to their areas of responsibility.

Accepted Answer

The answer of ________________ decision making allows managers at lower...

Question 9

The Glass Division of a company makes glass vases which have the following unit costs:
   The Florist Division of the company sells cut flowers and uses the glass vases. The Florist Division uses 10,000 vases per year and currently buys them from an outside supplier for $4 each. The Glass Division produces and sells 100,000 glass vases per year and sells them on the outside market for $4 each. Vases sold outside incur the sales commission; this commission would not be paid on internal transfers. The Glass Division and the Florist Division managers just met and agreed on a transfer price of $3.75 per vase. Is this a good idea for each division? Explain.

Accepted Answer

Yes, this is a good deal for each divisi

Question 10

Figure 12-5.
The following information pertains to the three divisions of Yang Company:
  
-Refer to Figure 12-5. What are the average operating assets for Division C?

Accepted Answer

A)  $95,000 
B)  $410,000 
C)  $82,000 
D)  $420,000 
A)  $95,000 
B)  $410,000 
C)  $82,000 
D)  $420,000

Question 11

Margin is calculated as

Accepted Answer

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

Question 12

In terms of operating income for the company as a whole, the transfer price set by the buying and selling divisions nets out.

Accepted Answer

A) True 
 B)False

Question 13

Figure 12-6.
The First National Bank has a mortgage loan office with conversion cost of $73,950 per month. There are five employees who each work 170 hours per month. Last month, 1,020 loan applications were processed, but the staff believes that system improvements could lead to the processing of as many as 1,700 per month.
-Refer to Figure 12-6. Calculate the following:

Accepted Answer

The answer of Figure 12-6.
The First National Bank has a...

Question 14

_____________ is the ratio of operating income to sales.

Accepted Answer

The answer of _____________ is the ratio of operating income...

Question 15

Decentralization is usually achieved by creating units called divisions.

Accepted Answer

A) True 
 B)False

Question 16

A(n) ________________ is when a manager is responsible only for sales.

Accepted Answer

The answer of A(n) ________________ is when a manager is...

Question 17

The level of the transfer price can affect the overall company because

Accepted Answer

A)  the higher the transfer price, the higher the operating income. 
B)  it may impact on the taxes paid by the multinational company. 
C)  the lower the transfer price, the lower the total costs. 
D)  internal transfers are always costly to the firm. 
E)  the transfer price may be higher than the cost-based price. 
A)  the higher the transfer price, the higher the operating income. 
B)  it may impact on the taxes paid by the multinational company. 
C)  the lower the transfer price, the lower the total costs. 
D)  internal transfers are always costly to the firm. 
E)  the transfer price may be higher than the cost-based price.

Question 18

Which of the following is a disadvantage of a focus on return on investment?

Accepted Answer

A)  It can encourage managers to focus on cost cutting efforts. 
B)  It can produce a narrow focus on divisional profitability at the expense of profitability for the overall firm. 
C)  It can encourage managers to cut inventories and reduce overall investment. 
D)  It can encourage managers to focus on the long run at the expense of the short run. 
E)  It can accomplish all of these disadvantages. 
A)  It can encourage managers to focus on cost cutting efforts. 
B)  It can produce a narrow focus on divisional profitability at the expense of profitability for the overall firm. 
C)  It can encourage managers to cut inventories and reduce overall investment. 
D)  It can encourage managers to focus on the long run at the expense of the short run. 
E)  It can accomplish all of these disadvantages.

Question 19

______________________ occurs whenever managers receive information about the effectiveness of strategy implementation as well as the validity of the assumptions underlying the strategy.

Accepted Answer

Double-loo

Question 20

Describe the four perspectives of the Balanced Scorecard.

Accepted Answer

The four perspectives of the Balanced Sc

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

Figure 12-5. The following information pertains to the three divisions of Yang Company: -Refer to Figure 12-5. What are the average operating assets for Division B?

Chase Company had the following income statement for last year: Beginning assets were $279,500 and ending assets were $296,500.

A key feature of economic value added (EVA) is that it emphasizes after-tax operating income and the actual cost of capital.

Provide the missing data in the following situations:

Beta Division had the following information: If the asset base is decreased by $100,000, with no other changes, the return on investment of Beta Division will be

___________________ is after tax operating income minus the dollar cost of capital employed.

________________ decision making allows managers at lower levels to make and implement key decisions pertaining to their areas of responsibility.

Figure 12-5. The following information pertains to the three divisions of Yang Company: -Refer to Figure 12-5. What are the average operating assets for Division C?

Margin is calculated as

In terms of operating income for the company as a whole, the transfer price set by the buying and selling divisions nets out.

_____________ is the ratio of operating income to sales.

Decentralization is usually achieved by creating units called divisions.

A(n) ________________ is when a manager is responsible only for sales.

The level of the transfer price can affect the overall company because

Which of the following is a disadvantage of a focus on return on investment?

______________________ occurs whenever managers receive information about the effectiveness of strategy implementation as well as the validity of the assumptions underlying the strategy.

Describe the four perspectives of the Balanced Scorecard.

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

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

Figure 12-5. The following information pertains to the three divisions of Yang Company: -Refer to Figure 12-5. What are the average operating assets for Division B?

Chase Company had the following income statement for last year: Beginning assets were $279,500 and ending assets were $296,500.

A key feature of economic value added (EVA) is that it emphasizes after-tax operating income and the actual cost of capital.

Provide the missing data in the following situations:

Beta Division had the following information: If the asset base is decreased by $100,000, with no other changes, the return on investment of Beta Division will be

___________________ is after tax operating income minus the dollar cost of capital employed.

________________ decision making allows managers at lower levels to make and implement key decisions pertaining to their areas of responsibility.

Figure 12-5. The following information pertains to the three divisions of Yang Company: -Refer to Figure 12-5. What are the average operating assets for Division C?

Margin is calculated as

In terms of operating income for the company as a whole, the transfer price set by the buying and selling divisions nets out.

_____________ is the ratio of operating income to sales.

Decentralization is usually achieved by creating units called divisions.

A(n) ________________ is when a manager is responsible only for sales.

The level of the transfer price can affect the overall company because

Which of the following is a disadvantage of a focus on return on investment?

______________________ occurs whenever managers receive information about the effectiveness of strategy implementation as well as the validity of the assumptions underlying the strategy.

Describe the four perspectives of the Balanced Scorecard.

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