Question 1

The manager of the furniture department of a leading retailer does not control the salaries of departmental personnel.

Accepted Answer

A) True 
 B)False

Question 2

What is Clydesdale Company's investment turnover?

Accepted Answer

A) 1.80 
B) 2.25 
C) 1.25 
D) 1.4 
A) 1.80 
B) 2.25 
C) 1.25 
D) 1.4

Question 3

Operating expenses incurred for the entire business as a unit that are not subject to the control of individual department managers are called indirect expenses.

Accepted Answer

A) True 
 B)False

Question 4

The gross profit for the Locomotive Division is

Accepted Answer

A) $57,960 
B) $14,790 
C) $27,240 
D) $47,280 
A) $57,960 
B) $14,790 
C) $27,240 
D) $47,280

Question 5

All of the following are advantages of decentralization except

Accepted Answer

A) Managers make better decisions when closer to the operations of the company. 
B) Expertise in all areas of the business is difficult; decentralization makes it better to delegate certain responsibilities. 
C) Each decentralized operation purchases its own assets and pays for operating costs. 
D) Decentralized managers can respond quickly to customer needs. 
A) Managers make better decisions when closer to the operations of the company. 
B) Expertise in all areas of the business is difficult; decentralization makes it better to delegate certain responsibilities. 
C) Each decentralized operation purchases its own assets and pays for operating costs. 
D) Decentralized managers can respond quickly to customer needs.

Question 6

What is the rate of return on investment for Division D?

Accepted Answer

A) 153.3% 
B) 114.7% 
C) 87.2% 
D) 233% 
A) 153.3% 
B) 114.7% 
C) 87.2% 
D) 233%

Question 7

How much will Division C's income from operations increase?

Accepted Answer

A) $0 
B) $75,000 
C) $12,500 
D) $50,000 
A) $0 
B) $75,000 
C) $12,500 
D) $50,000

Question 8

The income from operations for the Locomotive Division is

Accepted Answer

A) $57,960 
B) $14,790 
C) $27,240 
D) $47,280 
A) $57,960 
B) $14,790 
C) $27,240 
D) $47,280

Question 9

A responsibility center in which the authority over and responsibility for costs and revenues is vested in the department manager is termed a profit center.

Accepted Answer

A) True 
 B)False

Question 10

How much will Division 3's income from operations increase?

Accepted Answer

A) $150,000 
B) $50,000 
C) $32,000 
D) $72,000 
A) $150,000 
B) $50,000 
C) $32,000 
D) $72,000

Question 11

The residual income for Chicks is

Accepted Answer

A) $165,000 
B) $302,500 
C) $137,500 
D) $191,500 
A) $165,000 
B) $302,500 
C) $137,500 
D) $191,500

Question 12

Match each definition that follows with the term a-e it defines.
-Ratio of income from operations to sales

Accepted Answer

A) Controllable revenues 
B) Profit margin 
C) Investment turnover 
D) Rate of return on investments 
E) Residual income 
A) Controllable revenues 
B) Profit margin 
C) Investment turnover 
D) Rate of return on investments 
E) Residual income

Question 13

The costs of services charged to a profit center on the basis of its use of those services are

Accepted Answer

A) operating expenses 
B) noncontrollable charges 
C) service department charges 
D) activity charges 
A) operating expenses 
B) noncontrollable charges 
C) service department charges 
D) activity charges

Question 14

The materials used by the Hibiscus Company's Division A are currently purchased from an outside supplier at $55 per unit.Division B is able to supply Division A with 20,000 units at a variable cost of $42 per unit.The two divisions have recently negotiated a transfer price of $48 per unit for the 20,000 units.a By how much will each division's income increase as a result of this transfer? b What is the total increase in income for Hibiscus Company?

Accepted Answer

The answer of The materials used by the Hibiscus Company's...

Question 15

Which of the following is a measure of a cost center manager's performance?

Accepted Answer

A) budget performance report 
B) rate of return and residual income measures 
C) divisional income statements 
D) balance sheet 
A) budget performance report 
B) rate of return and residual income measures 
C) divisional income statements 
D) balance sheet

Question 16

It is beneficial for divisions in a company to negotiate a transfer price when the supplying division has unused capacity in its plant.

Accepted Answer

A) True 
 B)False

Question 17

A manager in a cost center also has responsibility and authority over the revenues.

Accepted Answer

A) True 
 B)False

Question 18

The Central Division of the Nebraska Company has a rate of return on investment of 28% and a profit margin of 14%.What is the investment turnover?

Accepted Answer

A) 0.2 
B) 2.0 
C) 5.0 
D) 0.5 
A) 0.2 
B) 2.0 
C) 5.0 
D) 0.5

Question 19

Some items are omitted from each of the following condensed divisional income statements of Demi Inc.
   a Determine the amount of the missing items, identifying them by letter a-f.
b Based on income from operations, which division is the most profitable?

Accepted Answer

The answer of Some items are omitted from each of...

Question 20

The DuPont formula uses financial and nonfinancial information to measure the performance of a business.

Accepted Answer

A) True 
 B)False

The manager of the furniture department of a leading retailer does not control the salaries of departmental personnel.

What is Clydesdale Company's investment turnover?

Operating expenses incurred for the entire business as a unit that are not subject to the control of individual department managers are called indirect expenses.

The gross profit for the Locomotive Division is

All of the following are advantages of decentralization except

What is the rate of return on investment for Division D?

How much will Division C's income from operations increase?

The income from operations for the Locomotive Division is

A responsibility center in which the authority over and responsibility for costs and revenues is vested in the department manager is termed a profit center.

How much will Division 3's income from operations increase?

The residual income for Chicks is

Match each definition that follows with the term a-e it defines. -Ratio of income from operations to sales

The costs of services charged to a profit center on the basis of its use of those services are

Which of the following is a measure of a cost center manager's performance?

It is beneficial for divisions in a company to negotiate a transfer price when the supplying division has unused capacity in its plant.

A manager in a cost center also has responsibility and authority over the revenues.

The Central Division of the Nebraska Company has a rate of return on investment of 28% and a profit margin of 14%.What is the investment turnover?

Some items are omitted from each of the following condensed divisional income statements of Demi Inc. a Determine the amount of the missing items, identifying them by letter a-f. b Based on income from operations, which division is the most profitable?

The DuPont formula uses financial and nonfinancial information to measure the performance of a business.

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Lean Principles, Lean Accounting, and Activity Analysis

Statement of Cash Flows

Financial Statement Analysis

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Exam 8: Performance Evaluation for Decentralized Operations

The manager of the furniture department of a leading retailer does not control the salaries of departmental personnel.

What is Clydesdale Company's investment turnover?

Operating expenses incurred for the entire business as a unit that are not subject to the control of individual department managers are called indirect expenses.

The gross profit for the Locomotive Division is

All of the following are advantages of decentralization except

What is the rate of return on investment for Division D?

How much will Division C's income from operations increase?

The income from operations for the Locomotive Division is

A responsibility center in which the authority over and responsibility for costs and revenues is vested in the department manager is termed a profit center.

How much will Division 3's income from operations increase?

The residual income for Chicks is

Match each definition that follows with the term a-e it defines. -Ratio of income from operations to sales

The costs of services charged to a profit center on the basis of its use of those services are

Which of the following is a measure of a cost center manager's performance?

It is beneficial for divisions in a company to negotiate a transfer price when the supplying division has unused capacity in its plant.

A manager in a cost center also has responsibility and authority over the revenues.

The Central Division of the Nebraska Company has a rate of return on investment of 28% and a profit margin of 14%.What is the investment turnover?

Some items are omitted from each of the following condensed divisional income statements of Demi Inc. a Determine the amount of the missing items, identifying them by letter a-f. b Based on income from operations, which division is the most profitable?

The DuPont formula uses financial and nonfinancial information to measure the performance of a business.

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Lean Principles, Lean Accounting, and Activity Analysis

Statement of Cash Flows

Financial Statement Analysis

Filters