Question 1

Any part of an organization that management wishes to evaluate is referred to as a

Accepted Answer

A) Department. 
B) Segment. 
C) Factory. 
D) Center. 
A) Department. 
B) Segment. 
C) Factory. 
D) Center.

Question 2

At Devoe Manufacturing,the Southern Division is responsible for the production and selling of products in fifteen states.This division is an example of which of the following responsibility centers?

Accepted Answer

A) Cost center 
B) Revenue center 
C) Profit center 
D) Investment center 
A) Cost center 
B) Revenue center 
C) Profit center 
D) Investment center

Question 3

A disadvantage of decentralized decision making is that two or more operational managers may evaluate and make the same decision,duplicating their efforts.

Accepted Answer

A) True 
 B)False

Question 4

An organizational

Accepted Answer

A) Expense center. 
B) Cost center. 
C) Product center. 
D) Manufacturing center. 
A) Expense center. 
B) Cost center. 
C) Product center. 
D) Manufacturing center.

Question 5

Major Corporation operates a wholesale electrical supply company with two locations.Each location is evaluated as an investment center.Selected results from the latest year are as follows:
   Required: 
a.Calculate the residual income for Location #1.
b.Calculate the EVA for Location #2.

Accepted Answer

a.Operating income = $600,000 - $460,000

Question 6

An investment center manager should be evaluated by

Accepted Answer

A) Examination of actual costs against budgeted costs. 
B) A review of both revenues and expenses,with a focus on operating income. 
C) How well assets have been used to generate income. 
D) None of these answer choices are correct. 
A) Examination of actual costs against budgeted costs. 
B) A review of both revenues and expenses,with a focus on operating income. 
C) How well assets have been used to generate income. 
D) None of these answer choices are correct.

Question 7

If you think of an organization's structure as a continuum,on the decentralized end of the continuum,operational managers

Accepted Answer

A) Are never evaluated. 
B) Are evaluated on costs,revenue,and profit. 
C) Have complete control over operational decisions. 
D) Have no authority to make decisions. 
A) Are never evaluated. 
B) Are evaluated on costs,revenue,and profit. 
C) Have complete control over operational decisions. 
D) Have no authority to make decisions.

Question 8

The formula for calculating ROI is

Accepted Answer

A) Segment margin divided by internal rate of return. 
B) Internal rate of return divided by average operating assets. 
C) Operating income divided by average operating assets. 
D) None of these answer choices are correct. 
A) Segment margin divided by internal rate of return. 
B) Internal rate of return divided by average operating assets. 
C) Operating income divided by average operating assets. 
D) None of these answer choices are correct.

Question 9

The price at which the exchange between divisions takes place is referred to as
A)Intercompany relay price.
B)Transfer price.
C)Both intercompany relay price and transfer price.
D)Neither intercompany relay price nor transfer price.

Accepted Answer

The answer of The price at which the exchange between...

Question 10

The Assembly Division of Mounds Corporation makes a component part that the Packaging Division needs to purchase.The Assembly Division's variable cost of manufacturing the component is $25 per
a.Calculate the cost-based-transfer price that the Assembly division should charge the Packaging division.
b.Calculate the market-based transfer price that the Assembly division should charge the Packaging division.

Accepted Answer

a.The cost-based price would b

Question 11

Traceable fixed costs are the responsibility of

Accepted Answer

A) Top management only. 
B) Managers who control them. 
C) Investment center managers only. 
D) None of these answer choices are correct. 
A) Top management only. 
B) Managers who control them. 
C) Investment center managers only. 
D) None of these answer choices are correct.

Question 12

The Delta division of Georgia Corporation generated net revenues of $6,000,000 and variable expenses of $3,500,000 during the year.If direct fixed costs were $1,000,000 and the segment margin was $1,500,000,what are the common corporate fixed costs?
a.$1,500,000
b.$4,500,000
c.$5,00,000
d.The answer cannot be determined from the information given.

Accepted Answer

The common corporate

Question 13

A segment of an organization is any part of the organization that management wishes to evaluate.Segment margin income statements highlight the elements under the segment manager's control.
Required:
a.What is "segment margin" and how is it calculated?
b.What is the difference between "segment margin" and a segment's "net operating income?"
c.Why are common allocated fixed costs an issue in evaluating the performance of a segment manager?

Accepted Answer

a.The segment margin is the amount of op

Question 14

If a cost is a traceable fixed cost at one level,it will remain a traceable cost at a lower level.

Accepted Answer

A) True 
 B)False

Question 15

An organizational structure in which decision-making authority for the entire organization rests in the hands of one person or a small group of people in a single location is called decentralization.

Accepted Answer

A) True 
 B)False

Question 16

Warner Company produces flash drives.The Custom division would like to buy 1,000,000

Accepted Answer

A) $4.35 
B) $4.55 
C) $6.83 
D) $9.75 
A) $4.35 
B) $4.55 
C) $6.83 
D) $9.75

Question 17

Blanco Corporation's Cajun Spice division has a segment margin is $432,500 for the current reporting period.The division has an asset turnover of 1.6.Segment margin as a percentage of sales is 10%.What is the division's ROI?

Accepted Answer

A) 16% 
B) 10% 
C) 6% 
D) The answer cannot be determined from the information given. 
A) 16% 
B) 10% 
C) 6% 
D) The answer cannot be determined from the information given.

Question 18

Before a company makes the decision to change the degree of decentralization,top management must consider the advantages and disadvantages of such a move.
Required:
a.List three advantages of decentralization.
b.List three disadvantages of decentralization.

Accepted Answer

a.Advantages: 
@#LAT-DLM&Yields better information

Question 19

The DuPont model for calculating ROI contains which of the following components?

Accepted Answer

A) Margin 
B) Asset turnover 
C) Both margin and asset turnover. 
D) Neither margin nor asset turnover. 
A) Margin 
B) Asset turnover 
C) Both margin and asset turnover. 
D) Neither margin nor asset turnover.

Question 20

ROI will not be improved by

Accepted Answer

A) Increasing revenue. 
B) Converting variable costs to traceable fixed costs. 
C) Decreasing assets. 
D) All of these answer choices will improve ROI. 
A) Increasing revenue. 
B) Converting variable costs to traceable fixed costs. 
C) Decreasing assets. 
D) All of these answer choices will improve ROI.

Any part of an organization that management wishes to evaluate is referred to as a

At Devoe Manufacturing,the Southern Division is responsible for the production and selling of products in fifteen states.This division is an example of which of the following responsibility centers?

A disadvantage of decentralized decision making is that two or more operational managers may evaluate and make the same decision,duplicating their efforts.

An organizational

Major Corporation operates a wholesale electrical supply company with two locations.Each location is evaluated as an investment center.Selected results from the latest year are as follows: Required: a.Calculate the residual income for Location #1. b.Calculate the EVA for Location #2.

An investment center manager should be evaluated by

If you think of an organization's structure as a continuum,on the decentralized end of the continuum,operational managers

The formula for calculating ROI is

The price at which the exchange between divisions takes place is referred to as A)Intercompany relay price. B)Transfer price. C)Both intercompany relay price and transfer price. D)Neither intercompany relay price nor transfer price.

Traceable fixed costs are the responsibility of

If a cost is a traceable fixed cost at one level,it will remain a traceable cost at a lower level.

An organizational structure in which decision-making authority for the entire organization rests in the hands of one person or a small group of people in a single location is called decentralization.

Warner Company produces flash drives.The Custom division would like to buy 1,000,000

Blanco Corporation's Cajun Spice division has a segment margin is $432,500 for the current reporting period.The division has an asset turnover of 1.6.Segment margin as a percentage of sales is 10%.What is the division's ROI?

Before a company makes the decision to change the degree of decentralization,top management must consider the advantages and disadvantages of such a move. Required: a.List three advantages of decentralization. b.List three disadvantages of decentralization.

The DuPont model for calculating ROI contains which of the following components?

ROI will not be improved by

Accounting As a Tool for Management

Cost Behavior and Cost Estimation

Cost-Volume-Profit Analysis and Pricing Decisions

Product Costs and Job Order Costing

Planning and Forecasting

Performance Evaluation: Variance Analysis

Activity-Based Costing and Activity Based Management

Using Accounting Information to Make Managerial Decisions

Capital Budgeting

Performance Evaluation Revisited: a Balanced Approach

Financial Statement Analysis

Statement of Cash Flows

Topic Focus: Process Costing

Topic Focus Variable and Absorption Costing

Topic Focus Standard Costing Systems

Topic Focus Customer Profitability

Filters

Exam 10: Decentralizing and Performance Evaluation

Any part of an organization that management wishes to evaluate is referred to as a

At Devoe Manufacturing,the Southern Division is responsible for the production and selling of products in fifteen states.This division is an example of which of the following responsibility centers?

A disadvantage of decentralized decision making is that two or more operational managers may evaluate and make the same decision,duplicating their efforts.

An organizational

Major Corporation operates a wholesale electrical supply company with two locations.Each location is evaluated as an investment center.Selected results from the latest year are as follows: Required: a.Calculate the residual income for Location #1. b.Calculate the EVA for Location #2.

An investment center manager should be evaluated by

If you think of an organization's structure as a continuum,on the decentralized end of the continuum,operational managers

The formula for calculating ROI is

The price at which the exchange between divisions takes place is referred to as A)Intercompany relay price. B)Transfer price. C)Both intercompany relay price and transfer price. D)Neither intercompany relay price nor transfer price.

Traceable fixed costs are the responsibility of

If a cost is a traceable fixed cost at one level,it will remain a traceable cost at a lower level.

An organizational structure in which decision-making authority for the entire organization rests in the hands of one person or a small group of people in a single location is called decentralization.

Warner Company produces flash drives.The Custom division would like to buy 1,000,000

Blanco Corporation's Cajun Spice division has a segment margin is $432,500 for the current reporting period.The division has an asset turnover of 1.6.Segment margin as a percentage of sales is 10%.What is the division's ROI?

Before a company makes the decision to change the degree of decentralization,top management must consider the advantages and disadvantages of such a move. Required: a.List three advantages of decentralization. b.List three disadvantages of decentralization.

The DuPont model for calculating ROI contains which of the following components?

ROI will not be improved by

Accounting As a Tool for Management

Cost Behavior and Cost Estimation

Cost-Volume-Profit Analysis and Pricing Decisions

Product Costs and Job Order Costing

Planning and Forecasting

Performance Evaluation: Variance Analysis

Activity-Based Costing and Activity Based Management

Using Accounting Information to Make Managerial Decisions

Capital Budgeting

Performance Evaluation Revisited: a Balanced Approach

Financial Statement Analysis

Statement of Cash Flows

Topic Focus: Process Costing

Topic Focus Variable and Absorption Costing

Topic Focus Standard Costing Systems

Topic Focus Customer Profitability

Filters