Exam 10: Performance Evaluation

The flexible budget total cost formula applies only to a specific relevant range.

The weighted average cost of capital is a component of the Return on Investment (ROI)calculation.

The convenience store owned by a national convenience store chain is likely to be classified as a(n)

There are two types of responsibility centers.

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 sales margin?

A company's flexible budget for 93,000 units of production showed sales of $300,000; variable costs of $150,000; and fixed costs of $90,000. What net operating income would you expect the company to earn if it produces and sells 98,000 units? (Assume 98,000 units is in the relevant range.)

Customer satisfaction, operational efficiency, and employee excellence are often measured as part of the balanced scorecard approach.

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

The number of repeat customers would be an example of measuring which perspective?

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

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

The Jazz Division of Heights Recording Corporation had the following results last year. Management's target rate of return is 12% and the weighted average cost of capital is 9%. Its effective tax rate is 40%. Required: a. Calculate the return on investment (ROI). b. Calculate the residual income.

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 sales margin?

The accounting department for a convenience store chain is likely to be considered a cost center.

A profit center will show revenues and costs.

Investigating significant variances from a budget to assign responsibility is an example of management by exception.

The manager of the truck maintenance department at FedEx would be in charge of a(n)

The ________ from the balanced scorecard focuses on continuing to improve and create value.

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 capital turnover?

Camden Corporation has operating income of $87,000, a sales margin of 15%, and capital turnover of 2.5. The return on investment (ROI)for Camden Corporation would be closest to