Exam 10: Performance Evaluation

Decentralization allows top management to hire workers with expert knowledge for each business unit.

The human resources department for Kohl's Department Stores would most likely be classified as a(n)

The ________ is the difference in dollars between amounts in the static budget and the flexible budget.

Sound Design sells its computer speakers for $115 per set. Its variable cost is $75 per set of speakers. Fixed costs are $80,000 per month for volumes up to 2,400 sets of speakers. Above 2,400 sets, monthly fixed costs are $115,000. What is the budgeted operating income (loss)at a sales level of 2,600 sets of speakers per month?

Pendant Publishing reported the following results for its Textbook Division: Pendant's target rate of return is 15% and the weighted average cost of capital is 10%. Its effective tax rate is 35%. What is the Textbook Division's Return on Investment (ROI)?

Peddlin' Pete's Cycles sells its entry-level bicycles for $400 each. Its variable cost is $250 per bicycle. Fixed costs are $35,000 per month for volumes up to 1,200 bicycles. Above 1,200 bicycles, monthly fixed costs are $55,000. What is the budgeted operating income at a level of 900 bicycles per month?

Lewis Company has operating income of $336,000. Its return on investment (ROI)is 48%, while its target rate of return is 10%. The total assets of Lewis Company would be closest to

Selected financial data for the Photocopies Division of Elizabeth's Business Machines is as follows: What is the Photocopier Division's residual income?

List and describe reasons why a company might choose to decentralize.

Raymond Corporation has an ROI of 31%, total assets of $6,300,000, and current liabilities of $820,000. What is Raymond Corporation's operating income?

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 Residual Income (RI)?

Management by exception would dictate that the manager investigate which of the following variances?

Total hours of continuing professional education taken by employees would be an example of measuring which perspective?

Management by exception saves management time by dictating that managers pay attention to only unfavorable variances.

Corbin Company had the following financial results for last month. What type of responsibility center do these financial results reflect?

A potential disadvantage of decentralization is which of the following?

Platz Company makes chairs. The budgeted selling price is $45 per chair, the variable rate is $15 per chair and budgeted fixed costs are $40,000 per month. What is the budgeted operating income for 3,200 chairs sold in a month?

The Pasta Division of Whole Grain Corporation had sales of $5,500,000 and operating income of $1,375,000 last year. The total assets of the Pasta Division were $2,750,000, while current liabilities were $330,000. Whole Grain Corporation's target rate of return is 12%, while its weighted average cost of capital is 8%. The effective tax rate for the company is 30%. What is the Pasta Division's sales margin?

The percentage of market share would be an example of measuring which perspective?

Residual Income (RI)equals operating income less minimum acceptable income.