Exam 11: Reporting for Control

(Appendix 11A)Central Medical Clinic has two Service Departments-Building Services and Energy-and three Operating Departments-Pediatrics,Geriatrics,and Surgery.Central allocates the cost of Building Services on the basis of square metres and Energy on the basis of patient days.Budgeted operating data for the year just completed follow: Required: a)Prepare a schedule to allocate Service Department costs to Operating Departments by the direct method,rounding all dollar amounts to the nearest whole dollar. b)Prepare a schedule to allocate Service Department costs to Operating Departments by the step-down method,allocating Building Services first,and rounding all amounts to the nearest whole dollar.

What were the sales in Year 1? (Round your intermediate calculations to one decimal place. )

Reed Company reported total sales of $150,000 last year and a return on investment (ROI)of 12%.If the company's turnover was 3,what was the company's operating income for the year?

Cable Company had the following results for the year just ended: What were Cable Company's average operating assets during the year?

All other things equal,a company's return on investment is affected by a change in which of the following?

(Appendix 11A)Harwood Company's quality cost report is to be based on the following data: Required: Prepare a quality cost report in good form with separate sections for prevention costs,appraisal costs,internal failure costs,and external failure costs.

Delmar Corporation is considering the use of residual income as a measure of the performance of its divisions.What major disadvantage of this method should the company consider before deciding to institute it?

Which of the following is NOT an operating asset?

What was the margin in Year 2?

(Appendix 11A)The following data have been extracted from the year-end reports of two companies: Company X and Company Y: Required: Fill in the missing data on the above table.

Consider the following three statements: I.A profit centre has control over both cost and revenue. II.An investment centre has control over invested funds,but not over costs and revenue. III.A cost centre has no control over sales. Which statement(s)is/are correct?

(Appendix 11A)What will be the total external failure cost appearing on the quality cost report?

(Appendix 11A)An increase in appraisal costs will usually result in an increase in internal failure costs.