Exam 12: Performance Evaluation and Decentralization

Select the term from below to match with the correct statement. -A(n) ___________ is a responsibility center in which a manager is responsible only for sales, or revenues.

A price charged for a component by the selling division to the buying division of the same company is called a(n)

In negotiated transfer pricing, the buying division sets the ceiling (maximum possible transfer price) for the bargaining range.

The manager of a division is displeased with the ROI of the division. One step that would increase ROI (holding everything else constant) is

Which of the following is not an advantage of ROI?

Residual income is calculated as

The use of residual income encourages managers to accept any project that earns above the minimum rate.

Turnover is calculated as

The difference between operating income and the minimum dollar return required on a company's operating assets is the _______________.

If the operating asset turnover ratio increased by 30% and the margin increased by 20%, the divisional ROI

The Balanced Scorecard perspective that defines the customer and market segments in which the business unit will compete is the ____ perspective.

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

Turnover is the ratio of sales to average operating assets.

Dixie Company has the following data for 2011: Dixie Company has a target ROI of 20%. Required: Calculate the following amounts for each division: A. Margin ratio B. Turnover ratio C. ROI D. Residual income E. EVA

The process value chain consists of

What are the advantages and disadvantages of return on investment (ROI)?

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

Select the appropriate definition for each of the items listed below. -The most common measure of performance for an investment center.

Provide the missing data in the following situations:

Last night, Shirley worked on her accounting homework for one and one half hours. During that time, she completed 6 problems. What is the velocity in problems per hour?