Guardian Corporation has two major divisions- Healthcare Products and Pharmaceutical Products. It provides the following information for the year. $\begin{array}{|l|r|r|} \hline& \text { Healthcare Division } & \begin{array}{c} \text { Pharmaceutical } \\ \text { Division } \end{array} \\ \hline \text { Net sales } & \$ 150,000 & \$ 1,000,000 \\ \hline \text { Operating income } & \$ 47,000 & \$ 218,400 \\ \hline \text { Average assets } & \$ 310,000 & \$ 5,660,000 \\ \hline \text { Target rate of return } & 13,0 \% & 13,0 \%\\\hline \end{array}$ Calculate the residual income for the Healthcare Division.

A) $27,500 B) $6700 C) $103,000 D) $47,000 A) $27,500 B) $6700 C) $103,000 D) $47,000

Marsh, Inc. provides the following information: \[\begin{array} { | l | c | c | c | c | } \hline & \text { Actual Sales } & \text { Static Budget } & \text { Flexible Budget } & \text { Sales Volume Variance } \\ \hline \text { Sales Revenue } & \$ 560,000 & \$ 535,000 & \$ 450,000 & ? \\ \hline \end{array}\] Calculate the sales volume variance.

A) 25,000 F B) 25,000 U C) $85,000 U D) $110,000 F A) 25,000 F B) 25,000 U C) $85,000 U D) $110,000 F

Worldwide Logistics provides the following information: \[\begin{array} { | l | r | } \hline \text { Operating income } & \$ 1,500,000 \\ \hline \text { Net sales } & \$ 14,000,000 \\ \hline \text { Average total assets } & \$ 2,000,000 \\ \hline \text { Management's target rate of return } & 30 \% \\ \hline \end{array}\] What is the company's residual income?

A) $500,000 B) $600,000 C) $1,550,000 D) $900,000 A) $500,000 B) $600,000 C) $1,550,000 D) $900,000

Dantone, Inc. provides the following information: \[\begin{array} { | l | r | } \hline \text { Profit margin ratio } & 5 \% \\ \hline \text { Asset turnover ratio } & 2 \text { times } \\ \hline \text { Net sales } & \$ 450,000 \\ \hline \text { Target rate of return } & 9 \% \\ \hline \end{array}\] Calculate the return on investment.

A) 10% B) 45% C) 4% D) 14% A) 10% B) 45% C) 4% D) 14%

Exam 24: Responsibility Accounting and Performance Evaluation

Guardian Corporation has two major divisions- Healthcare Products and Pharmaceutical Products. It provides the following information for the year. Healthcare Division Pharmaceutical Division Net sales \ 150,000 \ 1,000,000 Operating income \ 47,000 \ 218,400 Average assets \ 310,000 \ 5,660,000 Target rate of return 13,0\% 13,0\% Calculate the residual income for the Healthcare Division.

(Multiple Choice)

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Question 121

Investment center managers are responsible for generating profits and making the best use of the investment center's assets.

(True/False)

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Question 122

The primary objective in setting transfer prices is to achieve goal congruence by selecting a price that will maximize the overall company profits.

(True/False)

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Question 123

The practice of comparing a company's achievements against the best practices in the industry is known as goal congruence.

(True/False)

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Question 124

The transfer price is the transaction amount of one unit of goods when the transaction occurs between the company and its customers.

(True/False)

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Question 125

Marsh, Inc. provides the following information: Actual Sales Static Budget Flexible Budget Sales Volume Variance Sales Revenue \ 560,000 \ 535,000 \ 450,000 ? Calculate the sales volume variance.

(Multiple Choice)

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Question 126

The manager of a cost center is responsible for controlling costs and generating revenues for the company.

(True/False)

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Question 127

To evaluate the financial performance of an investment center, a business needs key performance indicators that measure ________.

(Multiple Choice)

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Question 128

Percentage of market share and rate of on-time deliveries are indicators of the ________ perspective.

(Multiple Choice)

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Question 129

A responsibility accounting system evaluates the performance of each responsibility center and its manager.

(True/False)

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Question 130

Which of the following four perspectives of the balanced scorecard enables management to answer the question, "How can we continue to improve and create value?"

(Multiple Choice)

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Question 131

A unique factor of responsibility accounting performance reports is the focus on responsibility and controllability.

(True/False)

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Question 132

Which of the following is the correct formula for the asset turnover ratio?

(Multiple Choice)

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Question 133

Decentralized companies often lead to diminished customer relations and slower customer response time.

(True/False)

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Question 134

Net income is used in the numerator of the return on investment formula.

(True/False)

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Question 135

Decentralization may cause the company to duplicate certain costs or activities.

(True/False)

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Question 136

Worldwide Logistics provides the following information: Operating income \ 1,500,000 Net sales \ 14,000,000 Average total assets \ 2,000,000 Management's target rate of return 30\% What is the company's residual income?

(Multiple Choice)

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Question 137

When using financial performance measures, which of the following statements is incorrect?

(Multiple Choice)

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Question 138

Which of the following is an expanded form of calculating return on investment?

(Multiple Choice)

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Question 139

Dantone, Inc. provides the following information: Profit margin ratio 5\% Asset turnover ratio 2 times Net sales \ 450,000 Target rate of return 9\% Calculate the return on investment.

(Multiple Choice)

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Question 140

Showing 121 - 140 of 188

Exam 24: Responsibility Accounting and Performance Evaluation

Investment center managers are responsible for generating profits and making the best use of the investment center's assets.

The primary objective in setting transfer prices is to achieve goal congruence by selecting a price that will maximize the overall company profits.

The practice of comparing a company's achievements against the best practices in the industry is known as goal congruence.

The transfer price is the transaction amount of one unit of goods when the transaction occurs between the company and its customers.

Marsh, Inc. provides the following information: Actual Sales Static Budget Flexible Budget Sales Volume Variance Sales Revenue \ 560,000 \ 535,000 \ 450,000 ? Calculate the sales volume variance.

The manager of a cost center is responsible for controlling costs and generating revenues for the company.

To evaluate the financial performance of an investment center, a business needs key performance indicators that measure ________.

Percentage of market share and rate of on-time deliveries are indicators of the ________ perspective.

A responsibility accounting system evaluates the performance of each responsibility center and its manager.

Which of the following four perspectives of the balanced scorecard enables management to answer the question, "How can we continue to improve and create value?"

A unique factor of responsibility accounting performance reports is the focus on responsibility and controllability.

Which of the following is the correct formula for the asset turnover ratio?

Decentralized companies often lead to diminished customer relations and slower customer response time.

Net income is used in the numerator of the return on investment formula.

Decentralization may cause the company to duplicate certain costs or activities.

Worldwide Logistics provides the following information: Operating income \ 1,500,000 Net sales \ 14,000,000 Average total assets \ 2,000,000 Management's target rate of return 30\% What is the company's residual income?

When using financial performance measures, which of the following statements is incorrect?

Which of the following is an expanded form of calculating return on investment?

Dantone, Inc. provides the following information: Profit margin ratio 5\% Asset turnover ratio 2 times Net sales \ 450,000 Target rate of return 9\% Calculate the return on investment.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Internal Control and Cash

Receivables

Plant Assets, Natural Resources, and Intangibles

Investments

Current Liabilities and Payroll

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost Management Systems: Activity-Based Just-In-Time

Cost Volume Profit Analysis

Variable Costing

Master Budgets

Flexible Budgets and Standard Cost Systems

Short-Term Business Decisions

Capital Investment Decisions

Understanding Accounting Information Systems and their Components

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