Scribe Company,a manufacturer of writing instruments,provides the following financial information: \[\begin{array} { | l | r | r | } \hline & \text { Pen Division } & \text { Pencil Division } \\ \hline \text { Operating income } & \$ 100,000 & \$ 40,000 \\ \hline \text { Net sales } & \$ 450,000 & \$ 200,000 \\ \hline \text { Total assets at Jan. 1 } & \$ 560,000 & \$ 255,000 \\ \hline \text { Total assets at Dec . 31 } & \$ 600,000 & \$ 275,000 \\ \hline \end{array}\] Calculate the return on investment for the Pencil Division.(Round your answer to two decimal places.)

A) 17.24% B) 15.09% C) 15.69% D) 14.55% A) 17.24% B) 15.09% C) 15.69% D) 14.55%

The following is divisional information for Kingfisher Enterprises: \[\begin{array} { | l | r | r | } \hline & \text { East Division } & { \text { West Division } } \\ \hline \text { Operating income } & \$ 250,000 & \$ 200,000 \\ \hline \text { Net sales } & 2,225,000 & 1,575,000 \\ \hline \text { Total assets at Jan. 1 } & 1,500,000 & 840,000 \\ \hline \text { Total assets at Dec . 31 } & 1,200,000 & 1,000,000 \\ \hline \end{array}\] The target rate of return is 12% for the East Division and is 10% for the West Division. Compute residual income for each division.

Average assets: (Beginning assets + Endi

State the strategy for each of the perspectives of the balanced scorecard. $\begin{array}{|l|c|} \hline \text { Balanced scorecard }\\ { \text { perspective } } & ~~~~~~~~~~~~\text { Strategy }~~~~~~~~~~~~~~~~~ \\ \hline \text { Financial } & \\\\ \hline \text { Customer } & \\\\ \hline \text { Internal business } & \\\\ \hline \text { Learning and } & \\ \text { growth } & \\ \hline \end{array}$

\[\begin{array} { | l | l | } \hline \b

Vasquez Construction Materials Company has a sales office that sells concrete culvert pipes to property developers.The sales office is a revenue center and prepares a monthly responsibility report.The following information is provided. \[\begin{array}{l} \text { Revenue Center Responsibility Report }\\ \begin{array} { | c | c | c | c | c | c | c | c | } \hline \begin{array} { c } \text { Product } \\ \text { Type } \end{array} & \begin{array} { c } \text { Actual } \\ \text { Sales } \\ \text { Revenue } \end{array} & \begin{array} { c } \text { Flexible } \\ \text { Budget } \\ \text { Variance } \end{array} & \mathbf { U } / \mathbf { F } & \begin{array} { c } \text { Flexible } \\ \text { Budget } \end{array} & \begin{array} { c } \text { Sales } \\ \text { Volume } \\ \text { Variance } \end{array} & \text { U/F } & \begin{array} { c } \text { Static } \\ \text { Budget } \end{array} \\ \hline 40 \text { inch } & \$ 31,500 & & & \$ 30,750 & & & \$ 40,600 \\ \hline 36 \text { inch long } & 40,150 & & & 42,100 & & & 33,000 \\ \hline 36 \text { inch short } & 36,100 & & & 33,200 & & & 31,000 \\ \hline 32 \text { inch } & 19,100 & & & 20,300 & & & 28,450 \\ \hline \end{array} \end{array}\] What is the sales volume variance for the 36-inch long pipe?

A) $1950 U B) $9100 F C) $9850 U D) $750 F A) $1950 U B) $9100 F C) $9850 U D) $750 F

Barrera Corporation provides the following financial information: \[\begin{array} { | l | r | } \hline \text { Minimum acceptable operating income } & \$ 556,600 \\ \hline \text { Average total assets } & \$ 2,000,000 \\ \hline \text { Operating income } & \$ 708,000 \\ \hline \text { Return on investment } & 35.40 \% \\ \hline \text { Net sales } & \$ 900,000 \\ \hline \end{array}\] Calculate the target rate of return.(Round your answer to two decimal places.)

A) 27.83% B) 78.67% C) 35.40% D) 61.84% A) 27.83% B) 78.67% C) 35.40% D) 61.84%

Exam 24: Responsibility Accounting and Performance Evaluation

Sea Cruise Equipment Company has several divisions that are investment centers.Data for the Boat Division and the Trailer Division are shown here: Boat Division Trailer Division Operating income \ 70,000 \ 42,000 Total assets at Jan. 1 \ 692,000 \ 233,000 Total assets at Dec. 31 \ 700,000 \ 218,000 With regard to the efficient use of assets,the Boat Division has a higher return on investment (ROI)because it has the highest operating income.

(True/False)

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Question 141

The financial perspective of the balanced scorecard is concerned with ________.

(Multiple Choice)

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Question 142

Which of the following is NOT an advantage of decentralization?

(Multiple Choice)

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Question 143

Scribe Company,a manufacturer of writing instruments,provides the following financial information: Pen Division Pencil Division Operating income \ 100,000 \ 40,000 Net sales \ 450,000 \ 200,000 Total assets at Jan. 1 \ 560,000 \ 255,000 Total assets at Dec . 31 \ 600,000 \ 275,000 Calculate the return on investment for the Pencil Division.(Round your answer to two decimal places.)

(Multiple Choice)

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Question 144

The following is divisional information for Kingfisher Enterprises: East Division West Division Operating income \ 250,000 \ 200,000 Net sales 2,225,000 1,575,000 Total assets at Jan. 1 1,500,000 840,000 Total assets at Dec . 31 1,200,000 1,000,000 The target rate of return is 12% for the East Division and is 10% for the West Division. Compute residual income for each division.

(Essay)

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Question 145

The performance reports of ________ contain actual and budgeted information on both their revenues and costs.

(Multiple Choice)

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Question 146

If upper management uses a short time frame to calculate ROI and RI,division managers have an incentive to take actions that will lead to an immediate increase in these measures.

(True/False)

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Question 147

State the strategy for each of the perspectives of the balanced scorecard. Balanced scorecard perspective \nobreakspace\nobreakspace\nobreakspace\nobreakspace\nobreakspace\nobreakspace\nobreakspace\nobreakspace\nobreakspace\nobreakspace\nobreakspace\nobreakspace Strategy \nobreakspace\nobreakspace\nobreakspace\nobreakspace\nobreakspace\nobreakspace\nobreakspace\nobreakspace\nobreakspace\nobreakspace\nobreakspace\nobreakspace\nobreakspace\nobreakspace\nobreakspace\nobreakspace\nobreakspace Financial Customer Internal business Learning and growth

(Essay)

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Question 148

Which of the following is a key performance indicator of the financial perspective in a balanced scorecard?

(Multiple Choice)

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Question 149

The return on investment of a company can be improved by either increasing average total assets or decreasing operating income.

(True/False)

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Question 150

Regardless of the type of responsibility center,responsibility reports should focus on information,not blame.

(True/False)

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Question 151

Vasquez Construction Materials Company has a sales office that sells concrete culvert pipes to property developers.The sales office is a revenue center and prepares a monthly responsibility report.The following information is provided. Revenue Center Responsibility Report Product Type Actual Sales Revenue Flexible Budget Variance / Flexible Budget Sales Volume Variance U/F Static Budget 40 inch \ 31,500 \ 30,750 \ 40,600 36 inch long 40,150 42,100 33,000 36 inch short 36,100 33,200 31,000 32 inch 19,100 20,300 28,450 What is the sales volume variance for the 36-inch long pipe?

(Multiple Choice)

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Question 152

Managerial accountants can design performance evaluation systems that encourage goal congruence.

(True/False)

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Question 153

Barrera Corporation provides the following financial information: Minimum acceptable operating income \ 556,600 Average total assets \ 2,000,000 Operating income \ 708,000 Return on investment 35.40\% Net sales \ 900,000 Calculate the target rate of return.(Round your answer to two decimal places.)

(Multiple Choice)

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Question 154

A lag indicator is a performance measure that forecasts future performance.

(True/False)

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Question 155

A market-based transfer price is based on the ________ when determining the transfer price.

(Multiple Choice)

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Question 156

One of the advantages of decentralization is that it allows top management to concentrate on long-term strategic planning.

(True/False)

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Question 157

Rosales Enterprises has a forklift division that operates as a profit center.Below is a partially completed responsibility report for the first quarter.Complete the responsibility report.(Round percentages to one decimal place.) $\textbf{Rosales Enterprises}\\\textbf{Responsibility Report}$ Flexible Budget Product Actual Flexible Variance Percentage Type Results Budget (F or U) Variance Sales Revenue \ 688,200 \ 700,000 Contribution Margin Divisional Segment Margin

(Essay)

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Question 158

Which of the following managers is likely to have the least amount of responsibilities?

(Multiple Choice)

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Question 159

Flexible budgets use budgeted (or standard)costs at the actual level of activity.

(True/False)

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Question 160

The financial perspective of the balanced scorecard is concerned with ________.

Which of the following is NOT an advantage of decentralization?

The performance reports of ________ contain actual and budgeted information on both their revenues and costs.

If upper management uses a short time frame to calculate ROI and RI,division managers have an incentive to take actions that will lead to an immediate increase in these measures.

Which of the following is a key performance indicator of the financial perspective in a balanced scorecard?

The return on investment of a company can be improved by either increasing average total assets or decreasing operating income.

Regardless of the type of responsibility center,responsibility reports should focus on information,not blame.

Managerial accountants can design performance evaluation systems that encourage goal congruence.

Barrera Corporation provides the following financial information: Minimum acceptable operating income \ 556,600 Average total assets \ 2,000,000 Operating income \ 708,000 Return on investment 35.40\% Net sales \ 900,000 Calculate the target rate of return.(Round your answer to two decimal places.)

A lag indicator is a performance measure that forecasts future performance.

A market-based transfer price is based on the ________ when determining the transfer price.

One of the advantages of decentralization is that it allows top management to concentrate on long-term strategic planning.

Which of the following managers is likely to have the least amount of responsibilities?

Flexible budgets use budgeted (or standard)costs at the actual level of activity.

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

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