Exam 22: Performance Measurement and Responsibility Accounting

Marsha Hansen,the manager of the Flint Plant of the Michigan Company is responsible for all of the plant's costs except her own salary.There are two operating departments within the plant,Departments A and B.Each department has its own manager.There is also a maintenance department that provides services equally to the two operating departments.The following information is available. Department managers are responsible for the wages and supplies in their department.They are not responsible for their own salary.Building rent,utilities,and maintenance are allocated to each department based on square footage. Required: Complete the responsibility accounting performance reports below that list costs controllable by the manager of Department A,the manager of Department B,and the manager of the Flint plant.

Pleasant Hills Properties is developing a golf course subdivision that includes 250 home lots; 100 lots are golf course lots and will sell for $95,000 each; 150 are street frontage lots and will sell for $65,000.The developer acquired the land for $1,800,000 and spent another $1,400,000 on street and utilities improvement.Compute the amount of joint cost to be allocated to the golf course lots using value basis.(Round your intermediate percentages to 2 decimal places.)

Which of the following statements is not correct concerning the elements of the cash conversion cycle time?

Explain the difference between direct and indirect expenses in accounting for departments.

Marks Corporation has two operating departments,Drilling and Grinding,and an office.The three categories of office expenses are allocated to the two departments using different allocation bases.The following information is available for the current period: -The amount of depreciation that should be allocated to Grinding for the current period is:

Cost center managers are evaluated on their success in controlling costs compared to budgeted costs.

Return on investment can be split into which of the following two measures?

Ready Company has two operating (production)departments: Assembly and Painting.Assembly has 150 employees and occupies 44,000 square feet; Painting has 100 employees and occupies 36,000 square feet.Indirect factory expenses for the current period are as follows: Administration is allocated based on workers in each department; maintenance is allocated based on square footage. -The amount of administration expenses that should be allocated to the Painting Department for the current period is:

What is the purpose of a departmental accounting system?

The number of hours that a department uses equipment and machinery is a reasonable basis for allocating depreciation.

Which of the following represents the correct formula for calculating the cash conversion cycle?

Marks Corporation has two operating departments,Drilling and Grinding,and an office.The three categories of office expenses are allocated to the two departments using different allocation bases.The following information is available for the current period: -The amount of the advertising cost that should be allocated to Grinding for the current period is:

When the selling division in an internal transfer has unsatisfied demand from outside customers for the product that is being transferred,then the lowest acceptable transfer price as far as the selling division is concerned is:

The difference between a profit center and an investment center is

Data pertaining to a company's joint production for the current period follows: Compute the cost to be allocated to Product L for this period's $660 of joint costs if the value basis is used. $\bold{\text{(Do not round your intermediate calculations.)}}$

The ________ is a report of the amount of sales less direct expenses for a department.

The process of preparing departmental income statements begins with allocating service department expenses.

Product lines are often evaluated as profit centers.

In the process of preparing department income statements,a company uses there are three steps before the statements can be completed.Describe those steps.