Exam 10: Performance Evaluation

Fern Company has a target rate of return of 14%, an ROI of 38%, and capital turnover of 2.5. The sales margin for Fern Company would be closest to

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 1,300 bicycles per month?

Reardon Enterprises has operating income of $90,000. Its return on investment (ROI)is 40%, while its target rate of return is 15%. The total assets of Reardon Enterprises would be closest to

The security department for a department store chain is likely to be classified as a(n)

List the four areas of a balanced scorecard. Describe each area. Define "key performance indicator" (KPI). Give an example of a KPI for each balanced scorecard area

The four perspectives of the balanced scorecard include all of the following except

The subscription sales manager for The New York Times would be in charge of a(n)

Which of the following causes the difference between amounts in the static budget and the flexible budget for a revenue center?

An amusement park's games department which reports revenues and expenses is likely to be classified as a(n)

All of the following are responsibility centers except

The capital turnover is operating income divided by sales.

Honda's East Liberty Auto Plant where Honda cars are built is most likely treated as a(n)

Southern Instruments makes calculators for business applications. The budgeted selling price is $120 per calculator, the variable rate is $98 per calculator and budgeted fixed costs are $150,000 per month. What is the budgeted operating income for 15,000 calculators sold in a month?

Ringo Corporation had the following results last year (in thousands). Management'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 division's Return on Investment (ROI)?

The Crest division of Procter & Gamble is most likely treated as a(n)

The success of a(n)________ is measured not only by its income, but also by relating that income to its invested capital.

The duties of an investment center manager are similar to those of a CEO.

The Sunny Division of Miami Corporation reported the following results from the past year. Shareholders require a return of 10%. Management calculated a weighted-average cost of capital (WACC)of 5%. Sunny's corporate tax rate is 30%. What is the division's Residual Income (RI)?

Financial performance measures are known as lag indicators. A lag indicator is a performance measure that predicts future performance.

Davis Corporation manufactures and sells portable radios. The radio sells for $35 per unit and its variable costs per unit are $30. Fixed costs are $64,000 per month for sales volumes up to 32,000 radios. If more than 32,000 radios are sold, the fixed costs will be $83,000. The flexible budget would reflect what monthly operating income for a sales volume of 41,000 radios?