Exam 9: Performance Measurement and Responsibility Accounting

Bridgestreet, Inc. has three operating departments: Cutting, Assembling, and Finishing. Cutting has 5,000 employees and occupies 15,000 square feet. Assembling has 4,000 employees and occupies 12,000 square feet. Finishing has 1,000 employees and occupies 23,000 square feet. Indirect factory costs for the current period were Administrative $170,000 and Maintenance $212,000. Administrative costs are allocated to operating departments based on the number of workers and maintenance costs are allocated to operating departments based on square footage occupied. -Based on the above data, determine the maintenance cost allocated to each operating department of Bridgestreet, Inc. A Cutting: $\$ 70,666$ $\quad$ Assernbling: $\$ 70,666$$\quad$ Finishing: $\$ 70,666$ B. Cuttirg: $\$ 15,000$ $\quad$ Assermbling: $\$ 12,000$ $\quad$ Finishing: $\$ 23,000$ C. Cutting: $\$ 63,600$ $\quad$ Assermbling: $\$ 50,880$$\quad$ Finishing: $\$ 97,520$ D. Cutting: $\$ 127,333$$\quad$ Assernbling: $\$ 127,333$ $\quad$ Finishing: $\$ 127,333$ E Cuttine: $\$ 115,000$$\quad$ Assembling: $\$ 91,680$ $\quad$ Finishing $\$ 175,720$

Department 1's contribution to overhead as a percent of sales is: A.8% B.40% C.20% D.30% E.12%

The price that should be used to record transfers between divisions in the same company is called the divisional price.

Quarry Co. Revenue \ 412,000 \ 450,000 Costs 380,000 411,000 Average assets 400,000 600,000 Fred Smith and Joe Barney are managers of two product lines for Quarry Company.One of them is a candidate for promotion based on performance -Based on the Quarry Company information, what is residual income for Smith and Barney? A.Smith: $4,000; Barney: $(3,000) B.Smith: $(3,000); Barney: $4,000 C.Smith: $28,000; Barney: $42,000 D.Smith: $8% ; Barney: 6.5% E.Smith: $0; Barney: $0

Within an organizational structure, the person most likely to be evaluated in terms of controllable costs would be:

An _______________________ is a department whose manager is responsible for using the center's assets to generate income for the center.

Costs that the manager does not have the power to determine or strongly influence are:

The following data are available for the Cleaning Services Department of Amitol Co. Revenues \ 216,000 Cost of sales 168,000 Expenses: Supplies-direct 12,000 Salaries-indirect allocated 34,000 Rent-direct 8,000 Rent-indirect allocated 4,500 Required: Calculate departmental contribution to overhead for the Cleaning Services Department, including the department's contribution as a percentage of revenues.

Joint costs can be allocated either using a physical basis or a value basis.

A company rents a small building with 10,000 square feet of space for $100,000 per year.The rent is allocated to the company's three departments on the basis of the value of the space occupied by each.Department 1 occupies 1,500 square feet of ground-floor space, Department 2 occupies 3,500 square feet of ground-floor space, and Department 3 occupies 5,000 square feet of second-floor space.If rent for comparable floor space in the neighborhood averages $15.00 per sq.ft.for ground-floor space and $10 per sq.ft.for second-floor space, what annual rent expense should be charged to each department?

Regardless of the system used in departmental cost analysis:

Eclectic Furniture Company allocates its indirect salaries of $12,500 on the basis of sales.Determine the indirect salaries allocated to Departments 1 and 2 using the following information: Revenues from sales \ 182,000 \ 78,000 \ 260,000 Direct salaries 42,250 22,750 65,000 Salaries allocated Dept.1 _______________ Salaries allocated to Dept.2 _______________

What is the balanced scorecard and how is it used?

Evaluation of the performance of managers of profit centers assumes that the managers can control or influence both costs and revenue generation.

A department that incurs costs without directly generating revenues is a:

The Footwear Department of Lee's Department Store had sales of $188,000, cost of goods sold of $132,500, indirect expenses of $13,250, and direct expenses of $27,500 for the current period.The Footwear Department's contribution to overhead as a percent of sales is:

List the steps required to prepare a departmental income statement.

________________________________ measures the income earned per dollar of sales.

Midwest Rocks receives and produces an order.What is the company's cycle time assuming the following times were measured during production of this order? Process time: .7 days Inspection time: .25 days Move time: 1.05 days Wait time: .5 days

A useful measure used to evaluate the manager of an investment center is return on total costs for the investment center.