Selected financial data for The Plastic Lumber Company's Outdoor Furniture Division is as follows: $\begin{array}{|l|rr|} \hline \text { Sales } & \$ 2,100,000 \\ \hline \text { Operating income } & \$ 420,000 \\ \hline \text { Total assets } & \$ 1,050,000 \\ \hline \text { Current liabilities } & \$ 200,000 \\ \hline \text { Target rate of return } & 12 \% \\ \hline \text { Weighted average cost of capital } & 10 \% \\ \hline \end{array}$ -What is The Plastic Lumber Company's Outdoor Furniture Division capital turnover?

A) 2.0 B) 2.5 C) 5.0 D) 10.5 A) 2.0 B) 2.5 C) 5.0 D) 10.5

Selected financial data for The Plastic Lumber Company's Outdoor Furniture Division is as follows: $\begin{array}{|l|rr|} \hline \text { Sales } & \$ 2,100,000 \\ \hline \text { Operating income } & \$ 420,000 \\ \hline \text { Total assets } & \$ 1,050,000 \\ \hline \text { Current liabilities } & \$ 200,000 \\ \hline \text { Target rate of return } & 12 \% \\ \hline \text { Weighted average cost of capital } & 10 \% \\ \hline \end{array}$ -What is The Plastic Lumber Company's Outdoor Furniture Division residual income?

A) $126,000 B) $294,000 C) $315,000 D) $396,000 A) $126,000 B) $294,000 C) $315,000 D) $396,000

Assume the Cell Phone Division of the First Electronics Corporation had the following results last year (in thousands).Management's target rate of return is 10% and the weighted average cost of capital is 7%.Its effective tax rate is 30%. \[\begin{array} { | l | r | } \hline \text { Sales } & \$ 6,000,000 \\ \hline \text { Operating income } & 900,000 \\ \hline \text { Total assets } & 3,000,000 \\ \hline \text { Current liabilities } & 750,000 \\ \hline \end{array}\] -What is the division's Residual Income (RI)?

A) $472,500 B) $600,000 C) $690,000 D) $300,000 A) $472,500 B) $600,000 C) $690,000 D) $300,000

Selected financial data for the Entertainment Division of Magic Enterprises is as follows: \[\begin{array} { | l | r r | } \hline \text { Sales } & \$ & 7,200,000 \\ \hline \text { Operating income } & \$ & 1,440,000 \\ \hline \text { Total assets } & \$ & 3,000,000 \\ \hline \text { Curgent liabilities } & \$ & 800,000 \\ \hline \text { Required rate of return } & & 8 \% \\ \hline \text { Weighted average cost of capital } & & 6 \% \\ \hline \end{array}\] - What is the Entertainment Division's residual income?

A) $ 240,000 B) $ 640,000 C) $ 864,000 D) $1,200,000 A) $ 240,000 B) $ 640,000 C) $ 864,000 D) $1,200,000

The Tandem division of the Great Adventures Cycles Company had the following results last year (in thousands). \[\begin{array} { | l | r r | } \hline \text { Sales } & \$ & 4,000,000 \\ \hline \text { Operating incare } & \$ & 480,000 \\ \hline \text { Total assets } & \$ & 2,000,000 \\ \hline \text { Current liabilities } & \$ & 300,000 \\ \hline \end{array}\] Management's target rate of return is 10% and the weighted average cost of capital is 8%.Its effective tax rate is 40%. - What is the Tandem division's Residual Income (RI)?

A) $ 152,000 B) $ 280,000 C) $ 320,000 D) $8,000,000 A) $ 152,000 B) $ 280,000 C) $ 320,000 D) $8,000,000

Exam 11: Performance Evaluation and the Balanced Scorecard

Selected financial data for The Plastic Lumber Company's Outdoor Furniture Division is as follows: Sales \ 2,100,000 Operating income \ 420,000 Total assets \ 1,050,000 Current liabilities \ 200,000 Target rate of return 12\% Weighted average cost of capital 10\% -What is The Plastic Lumber Company's Outdoor Furniture Division capital turnover?

(Multiple Choice)

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Question 81

Prescott Enterprises has a target rate of return of 12%,an ROI of 30%,and capital turnover of 2.0.The sales margin for Prescott Enterprises would be closest to:

(Multiple Choice)

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Question 82

Selected financial data for The Plastic Lumber Company's Outdoor Furniture Division is as follows: Sales \ 2,100,000 Operating income \ 420,000 Total assets \ 1,050,000 Current liabilities \ 200,000 Target rate of return 12\% Weighted average cost of capital 10\% -What is The Plastic Lumber Company's Outdoor Furniture Division residual income?

(Multiple Choice)

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Question 83

Assume the Cell Phone Division of the First Electronics Corporation had the following results last year (in thousands).Management's target rate of return is 10% and the weighted average cost of capital is 7%.Its effective tax rate is 30%. Sales \ 6,000,000 Operating income 900,000 Total assets 3,000,000 Current liabilities 750,000 -What is the division's Residual Income (RI)?

(Multiple Choice)

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Question 84

Discuss potential problems associated with decentralization.

(Essay)

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Question 85

The number of repeat customers would be an example of measuring which perspective?

(Multiple Choice)

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Question 86

Selected financial data for the Entertainment Division of Magic Enterprises is as follows: Sales \ 7,200,000 Operating income \ 1,440,000 Total assets \ 3,000,000 Curgent liabilities \ 800,000 Required rate of return 8\% Weighted average cost of capital 6\% - What is the Entertainment Division's residual income?

(Multiple Choice)

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Question 87

The sales margin is operating income divided by sales.

(True/False)

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Question 88

The Beverage Division of Natural Foods Corporation had sales of $4,200,000 and operating income of $840,000 last year.The total assets of the Beverage Division were $1,680,000,while current liabilities were $360,000.Natural Foods Corporation's target rate of return is 9%,while its weighted average cost of capital is 7%.The effective tax rate for the company is 40%. -What is the Beverage Division's Residual Income (RI)?

(Multiple Choice)

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Question 89

Falcone Company has a sales margin of 12%,a target rate of return of 10%,and capital turnover of 3.0.The sales in dollars for Falcone Company would be closest to:

(Multiple Choice)

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Question 90

Roberts Corporation has an ROI of 23%,total assets of $5,250,000,and current liabilities of $950,000.What is Roberts Corporation's operating income?

(Multiple Choice)

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Question 91

Which of the following perspectives from the balanced scorecard focuses on determining the company's "climate for action?"

(Multiple Choice)

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Question 92

Aligning subunit performance targets with company strategy would be an example of:

(Multiple Choice)

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Question 93

A cost center will show revenues and costs.

(True/False)

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Question 94

Which of the following perspectives from the balanced scorecard helps managers answer the question,"How do we look to shareholders?"

(Multiple Choice)

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Question 95

Using what measure may cause a manager to reject a project that would be profitable for the company as a whole?

(Multiple Choice)

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Question 96

The Tandem division of the Great Adventures Cycles Company had the following results last year (in thousands). Sales \ 4,000,000 Operating incare \ 480,000 Total assets \ 2,000,000 Current liabilities \ 300,000 Management's target rate of return is 10% and the weighted average cost of capital is 8%.Its effective tax rate is 40%. - What is the Tandem division's Residual Income (RI)?

(Multiple Choice)

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Question 97

Sales margin is calculated as sales divided by operating income.

(True/False)

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Question 98

The duties of an investment center manager are similar to those of a CFO.

(True/False)

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Question 99

The number of defects found during the manufacturing process would be an example of measuring which perspective?

(Multiple Choice)

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Question 100

Prescott Enterprises has a target rate of return of 12%,an ROI of 30%,and capital turnover of 2.0.The sales margin for Prescott Enterprises would be closest to:

Discuss potential problems associated with decentralization.

The number of repeat customers would be an example of measuring which perspective?

The sales margin is operating income divided by sales.

Falcone Company has a sales margin of 12%,a target rate of return of 10%,and capital turnover of 3.0.The sales in dollars for Falcone Company would be closest to:

Roberts Corporation has an ROI of 23%,total assets of $5,250,000,and current liabilities of $950,000.What is Roberts Corporation's operating income?

Which of the following perspectives from the balanced scorecard focuses on determining the company's "climate for action?"

Aligning subunit performance targets with company strategy would be an example of:

A cost center will show revenues and costs.

Which of the following perspectives from the balanced scorecard helps managers answer the question,"How do we look to shareholders?"

Using what measure may cause a manager to reject a project that would be profitable for the company as a whole?

Sales margin is calculated as sales divided by operating income.

The duties of an investment center manager are similar to those of a CFO.

The number of defects found during the manufacturing process would be an example of measuring which perspective?

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, lean Production, and the Costs of Quality

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Short Term Business Decisions

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

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