Question 1

Centralized companies split their operations into segments and top management delegates decision making to the segment managers.

Accepted Answer

A) True 
 B)False

Question 2

Revenue center responsibility reports show all costs incurred by the department and are useful when management needs to know the full cost of operating the department.

Accepted Answer

A) True 
 B)False

Question 3

An investment center manager is responsible for generating profits and managing invested capital.

Accepted Answer

A) True 
 B)False

Question 4

Define market-based transfer price.When should market-based transfer pricing be used? Explain your answer.

Accepted Answer

Market-based transfer price is a transfe

Question 5

List the primary goals of performance evaluation systems.

Accepted Answer

The goals of the performance e

Question 6

Madsen,Inc.intends to increase its profits by 50% in the next fiscal year.Which of the following is most likely to be a lead indicator in Madsen's performance report?

Accepted Answer

A) return on investment 
B) number of repeat customers 
C) net profit margin 
D) sales revenue growth 
A) return on investment 
B) number of repeat customers 
C) net profit margin 
D) sales revenue growth

Question 7

Uniox,Inc.intends to increase its profits by 50% in the next fiscal year.Which of the following is most likely to be a lag indicator in Uniox's performance report?

Accepted Answer

A) return on investment 
B) number of repeat customers 
C) rate of on-time deliveries 
D) defect rate 
A) return on investment 
B) number of repeat customers 
C) rate of on-time deliveries 
D) defect rate

Question 8

Flagship Logistics provides the following information: $$\begin{array} { | l | r | } 
\hline \text { Operating income } & \$ 1,500,000 \
\hline \text { Net sales } & \$ 14,000,000 \
\hline \text { Average total assets } & \$ 2,000,000 \
\hline \text { Management's target rate of return } & 25 \% \
\hline
\end{array}$$ What is the company's asset turnover ratio? (Round your answer to two decimal places.)

Accepted Answer

A) 4.00 
B) 4.48 
C) 12.44 
D) 7.00 
A) 4.00 
B) 4.48 
C) 12.44 
D) 7.00

Question 9

The internal business perspective of the balanced scorecard is concerned with ________.

Accepted Answer

A) how customers perceive the business and its products and services 
B) the company's ability to improve and create value 
C) which business processes the company must excel in to meet expectations 
D) whether investors and creditors view the company favorably 
A) how customers perceive the business and its products and services 
B) the company's ability to improve and create value 
C) which business processes the company must excel in to meet expectations 
D) whether investors and creditors view the company favorably

Question 10

Evergreen Corporation has two major divisions: Agricultural Products and Industrial Products.It provides the following information for the year. $$\begin{array} { | l | r | r | } 
\hline & \text { Agriculture Division } & \text { Industrial Division } \
\hline \text { Net sales } & \$ 140,000 & \$ 1,250,000 \
\hline \text { Operating income } & \$ 17,600 & \$ 218,000 \
\hline \text { Average assets } & \$ 340,000 & \$ 5,500,000 \
\hline
\end{array}$$ Calculate the profit margin ratio for the Industrial Division of the company.(Round your answer to two decimal places.)

Accepted Answer

A) 3.96% 
B) 5.18% 
C) 17.44% 
D) 12.57% 
A) 3.96% 
B) 5.18% 
C) 17.44% 
D) 12.57%

Question 11

To adequately evaluate an investment center's financial performance,summary performance measures should include both the division's operating income and its assets.

Accepted Answer

A) True 
 B)False

Question 12

The transaction amount for one unit of goods when the transaction occurs between divisions within the same company is the ________.

Accepted Answer

A) transfer price 
B) opportunity cost 
C) variable cost 
D) sales price 
A) transfer price 
B) opportunity cost 
C) variable cost 
D) sales price

Question 13

Match between columns
                        Premises: Customer retention
Employee satisfaction ratings
Cash flow from operations
Earnings growth
Percentage of compensation based on performance
New product development time
Percentage of orders filled each week
Residual income
Average machine set-up time
Employee promotion rate

Accepted Answer

The Answer of financial perspective and internal business perspective and is...

Question 14

When using financial performance measures,which of the following statements is incorrect?

Accepted Answer

A) Most companies use a weighted-average to determine the amount of average assets for ROI calculations. 
B) Average total assets are used for both ROI and RI computations. 
C) The limitations of financial performance measures reinforce the importance of the balanced scorecard. 
D) In general,calculating ROI based on the net book value of assets gives managers an incentive to continue using old,outdated equipment because its low net book value results in a higher ROI. 
A) Most companies use a weighted-average to determine the amount of average assets for ROI calculations. 
B) Average total assets are used for both ROI and RI computations. 
C) The limitations of financial performance measures reinforce the importance of the balanced scorecard. 
D) In general,calculating ROI based on the net book value of assets gives managers an incentive to continue using old,outdated equipment because its low net book value results in a higher ROI.

Question 15

Cost center responsibility reports typically focus on the flexible budget variance.

Accepted Answer

A) True 
 B)False

Question 16

The balanced scorecard focuses only on lead indicators,because lag indicators are not important for performance evaluation.

Accepted Answer

A) True 
 B)False

Question 17

In addition to considering both the division's operating income and its average total assets,residual income incorporates top management's target rate of return.

Accepted Answer

A) True 
 B)False

Question 18

Sousa Corporation provides the following financial information: $$\begin{array} { | l | r | } 
\hline \text { Minimum acceptable operating income } & \$ 556,600 \
\hline \text { Average total assets } & \$ 2,600,000 \
\hline \text { Operating income } & \$ 708,000 \
\hline \text { Return on investment } & 27 \% \
\hline \text { Net sales } & \$ 900,000 \
\hline
\end{array}$$ Calculate the residual income of Sousa Corporation.

Accepted Answer

A) $2,043,400 
B) $343,400 
C) $151,400 
D) $412,274 
A) $2,043,400 
B) $343,400 
C) $151,400 
D) $412,274

Question 19

If a market-based transfer price is used,the transfer price is based on the cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 20

Accelerated Logistics provides the following information: $$\begin{array} { | l | r | } 
\hline \text { Operating income } & \$ 1,600,000 \
\hline \text { Net sales } & \$ 14,000,000 \
\hline \text { Average total assets } & \$ 1,900,000 \
\hline \text { Management's target rate of return } & 20 \% \
\hline
\end{array}$$ What is the company's profit margin ratio? (Round your answer to two decimal places.)

Accepted Answer

A) 13.57% 
B) 11.43% 
C) 84.21% 
D) 1.10% 
A) 13.57% 
B) 11.43% 
C) 84.21% 
D) 1.10%

Centralized companies split their operations into segments and top management delegates decision making to the segment managers.

Revenue center responsibility reports show all costs incurred by the department and are useful when management needs to know the full cost of operating the department.

An investment center manager is responsible for generating profits and managing invested capital.

Define market-based transfer price.When should market-based transfer pricing be used? Explain your answer.

List the primary goals of performance evaluation systems.

Madsen,Inc.intends to increase its profits by 50% in the next fiscal year.Which of the following is most likely to be a lead indicator in Madsen's performance report?

Uniox,Inc.intends to increase its profits by 50% in the next fiscal year.Which of the following is most likely to be a lag indicator in Uniox's performance report?

Flagship Logistics provides the following information: Operating income \ 1,500,000 Net sales \ 14,000,000 Average total assets \ 2,000,000 Management's target rate of return 25\% What is the company's asset turnover ratio? (Round your answer to two decimal places.)

The internal business perspective of the balanced scorecard is concerned with ________.

To adequately evaluate an investment center's financial performance,summary performance measures should include both the division's operating income and its assets.

The transaction amount for one unit of goods when the transaction occurs between divisions within the same company is the ________.

When using financial performance measures,which of the following statements is incorrect?

Cost center responsibility reports typically focus on the flexible budget variance.

The balanced scorecard focuses only on lead indicators,because lag indicators are not important for performance evaluation.

In addition to considering both the division's operating income and its average total assets,residual income incorporates top management's target rate of return.

Sousa Corporation provides the following financial information: Minimum acceptable operating income \ 556,600 Average total assets \ 2,600,000 Operating income \ 708,000 Return on investment 27\% Net sales \ 900,000 Calculate the residual income of Sousa Corporation.

If a market-based transfer price is used,the transfer price is based on the cost of goods sold.

Accelerated Logistics provides the following information: Operating income \ 1,600,000 Net sales \ 14,000,000 Average total assets \ 1,900,000 Management's target rate of return 20\% What is the company's profit margin ratio? (Round your answer to two decimal places.)

Accounting Information Systems

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost Management Systems: Activity-Based, just-In-Time, and Quality Management Systems

Cost-Volume-Profit Analysis

Variable Costing

Master Budgets

Flexible Budgets and Standard Cost Systems

Short-Term Business Decisions

Capital Investment Decisions

Filters

Exam 24: Responsibility Accounting and Performance Evaluation

Centralized companies split their operations into segments and top management delegates decision making to the segment managers.

Revenue center responsibility reports show all costs incurred by the department and are useful when management needs to know the full cost of operating the department.

An investment center manager is responsible for generating profits and managing invested capital.

Define market-based transfer price.When should market-based transfer pricing be used? Explain your answer.

List the primary goals of performance evaluation systems.

Madsen,Inc.intends to increase its profits by 50% in the next fiscal year.Which of the following is most likely to be a lead indicator in Madsen's performance report?

Uniox,Inc.intends to increase its profits by 50% in the next fiscal year.Which of the following is most likely to be a lag indicator in Uniox's performance report?

Flagship Logistics provides the following information: Operating income \ 1,500,000 Net sales \ 14,000,000 Average total assets \ 2,000,000 Management's target rate of return 25\% What is the company's asset turnover ratio? (Round your answer to two decimal places.)

The internal business perspective of the balanced scorecard is concerned with ________.

To adequately evaluate an investment center's financial performance,summary performance measures should include both the division's operating income and its assets.

The transaction amount for one unit of goods when the transaction occurs between divisions within the same company is the ________.

When using financial performance measures,which of the following statements is incorrect?

Cost center responsibility reports typically focus on the flexible budget variance.

The balanced scorecard focuses only on lead indicators,because lag indicators are not important for performance evaluation.

In addition to considering both the division's operating income and its average total assets,residual income incorporates top management's target rate of return.

Sousa Corporation provides the following financial information: Minimum acceptable operating income \ 556,600 Average total assets \ 2,600,000 Operating income \ 708,000 Return on investment 27\% Net sales \ 900,000 Calculate the residual income of Sousa Corporation.

If a market-based transfer price is used,the transfer price is based on the cost of goods sold.

Accelerated Logistics provides the following information: Operating income \ 1,600,000 Net sales \ 14,000,000 Average total assets \ 1,900,000 Management's target rate of return 20\% What is the company's profit margin ratio? (Round your answer to two decimal places.)

Accounting Information Systems

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost Management Systems: Activity-Based, just-In-Time, and Quality Management Systems

Cost-Volume-Profit Analysis

Variable Costing

Master Budgets

Flexible Budgets and Standard Cost Systems

Short-Term Business Decisions

Capital Investment Decisions

Filters