Exam 9: Performance Measurement and Responsibility Accounting

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 -Using the data above, which of the following is a true statement?

Which of the following is an example of a performance measure of internal business processes that would be found in a balanced scorecard:

What is a transfer price and what methods are used to set its value?

In the preparation of departmental income statements, the preparer completes the following steps in the following order:

Process time is the time:

Evaluation of the performance of a department involves only financial measures.

When a company has no excess capacity, the use of cost-based transfer pricing is preferred.

Which of the following is an example of a financial performance measure that would be found in a balanced scorecard?

Which of the following would not appear on a responsibility accounting performance report?

Assume Rock Bottom Golf is divided into four departments that operate as profit centers and that the data below is from the most recent fiscal year. Golf Clubs Golf Bags Golf Balls Golf Apparel Sales \ 200,000 \ 400,000 \ 800,000 \ 1,600,000 Cost of goods 90,000 220,000 400,000 960,000 Sold Direct expenses Salaries 18,000 54,000 90,000 226,000 Insurance 2,000 3,000 6,000 120,000 Utilities 1,000 2,000 3,000 10,000 -Given the information above, which of Rock Bottom Golf's departments has the highest contribution margin as a percent of sales? A.Golf Clubs. B.Golf Bags. C.Golf Balls. D.Golf Apparel. E.None, this is not a calculation performed at the department level.

Departmental contribution to overhead is the amount of revenues for that department less its direct expenses.

A difficult problem in calculating the total costs and expenses of a department is:

A transfer price has no direct impact on a company's overall profits.

Departmental wage expenses are direct expenses of that department.

What is the purpose of a responsibility accounting system?

Indirect expenses should be allocated to departments based on the benefits received by each department.

Midwest Rocks receives and produces an order.What is the company's cycle efficiency 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

Discuss some of the financial and nonfinancial performance measures that are important to United By Blue founder Brian Linton.

A company produces two joint products (called 101 and 202)in a single operation that uses one raw material called Casko.Four hundred gallons of Casko were purchased at a cost of $800 and were used to produce 150 gallons of Product 101, selling for $5 per gallon, and 75 gallons of Product 202, selling for $15 per gallon.How much of the $800 cost should be allocated to each product, assuming that the company allocates cost based on sales revenue?