Question 1

The performance reports of cost centers only include those costs incurred within each individual cost center.

Accepted Answer

A) True 
 B)False

Question 2

Transfer price is the term used to describe the amount one division pays to another division within the same company to purchase a component part.

Accepted Answer

A) True 
 B)False

Question 3

Pizza Hut, a stand-alone division of Yum! Brands, may 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 4

For the most recent year, Robin Company reports operating income of $660,000. Robin's sales margin is 7%, and capital turnover is 2.0. What is Robin's return on investment (ROI)?

Accepted Answer

A) 4% 
B) 7% 
C) 2% 
D) 14% 
A) 4% 
B) 7% 
C) 2% 
D) 14%

Question 5

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 3%. Allied's corporate tax rate is 35%.   What is the division's Residual Income (RI)?

Accepted Answer

A) $175,000 
B) $98,000 
C) $235,000 
D) $224,000 
A) $175,000 
B) $98,000 
C) $235,000 
D) $224,000

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Everyone Deserves to Smile mobile dentist office budgeted for 4325 patient visits a year. Everyone Deserves to Smile actually saw 4415 patients during the year and they have provided the following data:   Based on the given information, what is the volume variance for revenue?

Accepted Answer

A) $90 Favorable 
B) $0 
C) $6750 Unfavorable 
D) $6750 Favorable 
A) $90 Favorable 
B) $0 
C) $6750 Unfavorable 
D) $6750 Favorable

Question 8

Which of the following is the operating income an investment center generates before subtracting common fixed costs that are allocated to the center?

Accepted Answer

A) Sales volume variance 
B) Segment margin 
C) Return on investment (ROI) 
D) Return on assets (RO
A)  
A) Sales volume variance 
B) Segment margin 
C) Return on investment (ROI) 
D) Return on assets (RO
A)

Question 9

A flexible budget is a budget prepared for a different level of volume than that which was originally anticipated.

Accepted Answer

A) True 
 B)False

Question 10

The Box Manufacturing Division of the Allied Paper Company reported the following results from the past year. Shareholders require a return of 6%. Management calculated a weighted-average cost of capital (WACC)of 3%. Allied's corporate tax rate is 30%.   What is the division's capital turnover?

Accepted Answer

A) 0)20 
B) 10.00 
C) 50.00 
D) 1)67 
A) 0)20 
B) 10.00 
C) 50.00 
D) 1)67

Question 11

Goal congruence is a system that evaluates the performance of each responsibility center and its manager.

Accepted Answer

A) True 
 B)False

Question 12

Flash E-Card Manufacturing manufactures software parts for the computer software systems that produce e-cards. The Flash II part is currently manufactured in the Computer Department. The Data Department also produces the part and the plant has excess capacity to produce the Flash II part. The current market price of the Flash II part is $700. The managerial accountant reported the following manufacturing costs and variable expense data:   If the highest acceptable transfer price is $700 in the market, what is the lowest acceptable in-house price the Data Department should receive to produce the part in-house at the Computer Department?

Accepted Answer

A) $160 
B) $140 
C) $810 
D) $1110 
A) $160 
B) $140 
C) $810 
D) $1110

The performance reports of cost centers only include those costs incurred within each individual cost center.

Transfer price is the term used to describe the amount one division pays to another division within the same company to purchase a component part.

Pizza Hut, a stand-alone division of Yum! Brands, may be classified as a(n)

For the most recent year, Robin Company reports operating income of $660,000. Robin's sales margin is 7%, and capital turnover is 2.0. What is Robin's return on investment (ROI)?

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 3%. Allied's corporate tax rate is 35%. What is the division's Residual Income (RI)?

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

Everyone Deserves to Smile mobile dentist office budgeted for 4325 patient visits a year. Everyone Deserves to Smile actually saw 4415 patients during the year and they have provided the following data: Based on the given information, what is the volume variance for revenue?

Which of the following is the operating income an investment center generates before subtracting common fixed costs that are allocated to the center?

A flexible budget is a budget prepared for a different level of volume than that which was originally anticipated.

The Box Manufacturing Division of the Allied Paper Company reported the following results from the past year. Shareholders require a return of 6%. Management calculated a weighted-average cost of capital (WACC)of 3%. Allied's corporate tax rate is 30%. What is the division's capital turnover?

Goal congruence is a system that evaluates the performance of each responsibility center and its manager.

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 Evalulation

The performance reports of cost centers only include those costs incurred within each individual cost center.

Transfer price is the term used to describe the amount one division pays to another division within the same company to purchase a component part.

Pizza Hut, a stand-alone division of Yum! Brands, may be classified as a(n)

For the most recent year, Robin Company reports operating income of $660,000. Robin's sales margin is 7%, and capital turnover is 2.0. What is Robin's return on investment (ROI)?

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 3%. Allied's corporate tax rate is 35%. What is the division's Residual Income (RI)?

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

Everyone Deserves to Smile mobile dentist office budgeted for 4325 patient visits a year. Everyone Deserves to Smile actually saw 4415 patients during the year and they have provided the following data: Based on the given information, what is the volume variance for revenue?

Which of the following is the operating income an investment center generates before subtracting common fixed costs that are allocated to the center?

A flexible budget is a budget prepared for a different level of volume than that which was originally anticipated.

The Box Manufacturing Division of the Allied Paper Company reported the following results from the past year. Shareholders require a return of 6%. Management calculated a weighted-average cost of capital (WACC)of 3%. Allied's corporate tax rate is 30%. What is the division's capital turnover?

Goal congruence is a system that evaluates the performance of each responsibility center and its manager.

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