Question 1

Another name for a static budget is a flexible budget.

Accepted Answer

A) True 
 B)False

Question 2

If selling and administrative expenses decrease while everything else remains the same, what will happen to return on investment (ROI)?

Accepted Answer

A) ROI will decrease. 
B) ROI will increase. 
C) ROI will not be affected. 
D) We cannot determine the direction of the effect from the information provided. 
A) ROI will decrease. 
B) ROI will increase. 
C) ROI will not be affected. 
D) We cannot determine the direction of the effect from the information provided.

Question 3

Management by exception directs management's attention to important differences between actual and budgeted amounts.

Accepted Answer

A) True 
 B)False

Question 4

Companies evaluate investment center performance the way they evaluate profit center performance.

Accepted Answer

A) True 
 B)False

Question 5

The central reservation office at MegaBus is most likely treated as a(n)

Accepted Answer

A) cost center. 
B) investment center. 
C) revenue center. 
D) profit center. 
A) cost center. 
B) investment center. 
C) revenue center. 
D) profit center.

Question 6

The manager of the corporate division of Anthropologie (a retail clothing chain)would be in charge of a(n)

Accepted Answer

A) investment center. 
B) cost center. 
C) profit center. 
D) revenue center. 
A) investment center. 
B) cost center. 
C) profit center. 
D) revenue center.

Question 7

The number of defects found during the manufacturing process would be an example of measuring which perspective?

Accepted Answer

A) Internal business 
B) Customer 
C) Financial 
D) Learning and growth 
A) Internal business 
B) Customer 
C) Financial 
D) Learning and growth

Question 8

The Box Manufacturing Division of the Allied Paper Company reported the following results from the past year. Shareholders require a return of 7%. Management calculated a weighted-average cost of capital (WACC)of 5%. Allied's corporate tax rate is 30%.   What is the division's capital turnover?

Accepted Answer

A) 0.47 
B) 4.00 
C) 8.57 
D) 2,50 
A) 0.47 
B) 4.00 
C) 8.57 
D) 2,50

Question 9

The performance report for a ________ would typically include revenues and costs.

Accepted Answer

A) cost center 
B) sales center 
C) profit center 
D) revenue center 
A) cost center 
B) sales center 
C) profit center 
D) revenue center

Question 10

Small companies tend to use decentralized decision making.

Accepted Answer

A) True 
 B)False

Question 11

KPI in the Balanced Scorecard stands for Knowledge Profitability Index.

Accepted Answer

A) True 
 B)False

Question 12

Dove Incorporated has operating income of $650,000, a sales margin of 10%, and a capital turnover rate of 2.0. What amount would Dove report for sales?

Accepted Answer

A) $1,300,000 
B) $6,500,000 
C) $65,000 
D) $325,000 
A) $1,300,000 
B) $6,500,000 
C) $65,000 
D) $325,000

Question 13

The following data relates to Logan Electric and its Light Bulb Division.   What is the Light Bulb Division's capital turnover?

Accepted Answer

A) 10.0 
B) 4.0 
C) 2.5 
D) 5.5 
A) 10.0 
B) 4.0 
C) 2.5 
D) 5.5

Question 14

Decentralization may duplicate a company's costs since each business unit may, for example, have its own purchasing department.

Accepted Answer

A) True 
 B)False

Question 15

The CEO of Banana Republic, a division of The Gap, Inc. would be in charge of a(n)

Accepted Answer

A) cost center. 
B) investment center. 
C) profit center. 
D) revenue center. 
A) cost center. 
B) investment center. 
C) profit center. 
D) revenue center.

Question 16

Selected financial data for The Portland Porcelain Works Coffee Mug Division is as follows:   What is The Portland Porcelain Works Coffee Mug Division capital turnover?

Accepted Answer

A) 5.6 
B) 12.8 
C) 3.2 
D) 1.7 
A) 5.6 
B) 12.8 
C) 3.2 
D) 1.7

Question 17

Favorable sales volume variance for revenues is caused by which of the following?

Accepted Answer

A) Actual net income for the subunit is greater than budgeted net income. 
B) Actual sales in dollars are greater than the master budget sales in dollars. 
C) The flexible budget sales in dollars are greater than the static budget sales in dollars. 
D) Actual sales in dollars are less than the static budget sales in dollars. 
A) Actual net income for the subunit is greater than budgeted net income. 
B) Actual sales in dollars are greater than the master budget sales in dollars. 
C) The flexible budget sales in dollars are greater than the static budget sales in dollars. 
D) Actual sales in dollars are less than the static budget sales in dollars.

Question 18

The balanced scorecard considers only financial performance measures.

Accepted Answer

A) True 
 B)False

Question 19

Lubrizol is a chemical company that specializes in producing lubricants. Lubrizol was acquired in 2011 for $9 billion by investment holding company Berkshire Hathaway. Lubrizol is likely to be classified as a(n)

Accepted Answer

A) cost center. 
B) investment center. 
C) profit center. 
D) revenue center. 
A) cost center. 
B) investment center. 
C) profit center. 
D) revenue center.

Question 20

Goal incongruence frequently exists in decentralized organizations.

Accepted Answer

A) True 
 B)False

Another name for a static budget is a flexible budget.

If selling and administrative expenses decrease while everything else remains the same, what will happen to return on investment (ROI)?

Management by exception directs management's attention to important differences between actual and budgeted amounts.

Companies evaluate investment center performance the way they evaluate profit center performance.

The central reservation office at MegaBus is most likely treated as a(n)

The manager of the corporate division of Anthropologie (a retail clothing chain)would be in charge of a(n)

The number of defects found during the manufacturing process would be an example of measuring which perspective?

The Box Manufacturing Division of the Allied Paper Company reported the following results from the past year. Shareholders require a return of 7%. Management calculated a weighted-average cost of capital (WACC)of 5%. Allied's corporate tax rate is 30%. What is the division's capital turnover?

The performance report for a ________ would typically include revenues and costs.

Small companies tend to use decentralized decision making.

KPI in the Balanced Scorecard stands for Knowledge Profitability Index.

Dove Incorporated has operating income of $650,000, a sales margin of 10%, and a capital turnover rate of 2.0. What amount would Dove report for sales?

The following data relates to Logan Electric and its Light Bulb Division. What is the Light Bulb Division's capital turnover?

Decentralization may duplicate a company's costs since each business unit may, for example, have its own purchasing department.

The CEO of Banana Republic, a division of The Gap, Inc. would be in charge of a(n)

Selected financial data for The Portland Porcelain Works Coffee Mug Division is as follows: What is The Portland Porcelain Works Coffee Mug Division capital turnover?

Favorable sales volume variance for revenues is caused by which of the following?

The balanced scorecard considers only financial performance measures.

Lubrizol is a chemical company that specializes in producing lubricants. Lubrizol was acquired in 2011 for $9 billion by investment holding company Berkshire Hathaway. Lubrizol is likely to be classified as a(n)

Goal incongruence frequently exists in decentralized organizations.

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, Lean Operations, and the Costs of Quality

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters

Exam 10: Performance Evaluation

Another name for a static budget is a flexible budget.

If selling and administrative expenses decrease while everything else remains the same, what will happen to return on investment (ROI)?

Management by exception directs management's attention to important differences between actual and budgeted amounts.

Companies evaluate investment center performance the way they evaluate profit center performance.

The central reservation office at MegaBus is most likely treated as a(n)

The manager of the corporate division of Anthropologie (a retail clothing chain)would be in charge of a(n)

The number of defects found during the manufacturing process would be an example of measuring which perspective?

The Box Manufacturing Division of the Allied Paper Company reported the following results from the past year. Shareholders require a return of 7%. Management calculated a weighted-average cost of capital (WACC)of 5%. Allied's corporate tax rate is 30%. What is the division's capital turnover?

The performance report for a ________ would typically include revenues and costs.

Small companies tend to use decentralized decision making.

KPI in the Balanced Scorecard stands for Knowledge Profitability Index.

Dove Incorporated has operating income of $650,000, a sales margin of 10%, and a capital turnover rate of 2.0. What amount would Dove report for sales?

The following data relates to Logan Electric and its Light Bulb Division. What is the Light Bulb Division's capital turnover?

Decentralization may duplicate a company's costs since each business unit may, for example, have its own purchasing department.

The CEO of Banana Republic, a division of The Gap, Inc. would be in charge of a(n)

Selected financial data for The Portland Porcelain Works Coffee Mug Division is as follows: What is The Portland Porcelain Works Coffee Mug Division capital turnover?

Favorable sales volume variance for revenues is caused by which of the following?

The balanced scorecard considers only financial performance measures.

Lubrizol is a chemical company that specializes in producing lubricants. Lubrizol was acquired in 2011 for $9 billion by investment holding company Berkshire Hathaway. Lubrizol is likely to be classified as a(n)

Goal incongruence frequently exists in decentralized organizations.

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, Lean Operations, and the Costs of Quality

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters