Exam 11: Reporting for Control

Assuming that a segment has both variable expenses and traceable fixed expenses,an increase in sales should increase operating income by an amount equal to the sales multiplied by the segment margin ratio.

(Appendix 11A)Under the step-down method of allocation,what would be the amount of Custodial Services cost allocated to the Assembly Department?

A balanced scorecard should contain every performance measure that can be expected to influence a company's profits.

What were Division B's average operating assets rounded to the nearest dollars?

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

The Winter Products Division of American Sports Corporation produces and markets two products for use in the snow: Sleds and Saucers.The following data were gathered on activities last month: Required: a.Prepare a segmented income statement in the contribution format for last month,showing both "Amount" and "Percent" columns for the division as a whole and for each product. b.Why might it be very difficult to calculate separate break-even sales for each product? c.Refer to the original data and,if necessary,the results of the segmented income statement prepared in part (a)above.Calculate the total break-even sales (in both units AND dollars)for last month,assuming that none of the fixed production costs and fixed selling expenses is traceable.Allocate the total break-even sales between the two products. d.Again,refer to the original data and,if necessary,the results of the segmented income statement prepared in part (a)above.Calculate the total break-even sales (in both units AND dollars)for last month,assuming that the "allocated" amounts of the division's administrative expenses are fixed and actually traceable.Allocate the total break-even sales between the two products. e.How reasonable are the total break-even sales numbers calculated in parts (c)and (d)given the actual results for last month?

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

What were Ieso Company's total fixed expenses for the year?

All other things being equal,which of the following is a consequence of an increase in a division's traceable fixed expenses?

What is Company A's return on investment (ROI)?

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

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

(Appendix 11A)Boa Corp.uses the direct method to allocate service department overhead costs to operating departments.Information for the month of June follows: What would be the amount of maintenance department costs allocated to Operating Department A for June?

The emphasis in the balanced scorecard is on improvement rather than meeting a preset standard.

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.

(Appendix 11A)Which of the following would be classified as a prevention cost on a quality cost report?

All other things equal,which of the following events would generally cause an increase in a company's return on investment (ROI)?

What were the sales for Year 2?

What would be a good example of a common cost that normally could NOT be assigned to products on a segmented income statement except on an arbitrary basis?

Which of the following is the main assumption that is made about managers in general in support of decentralization?