Question 1

A manager is responsible for costs only in an

Accepted Answer

A) profit center 
B) investment center 
C) volume center 
D) cost center 
A) profit center 
B) investment center 
C) volume center 
D) cost center

Question 2

Responsibility accounting reports that are given to lower level managers are usually very detailed, in turn, higher level managers will be given a summary report.

Accepted Answer

A) True 
 B)False

Question 3

Data for Divisions A, B, C, D, and E are as follows:
   a Determine the missing items, identifying each by letter a-o.
b Which division is most profitable in terms of income from operations?
c Which division is most profitable in terms of rate of return on investment?
Round percentage and turnover values to one decimal point.

Accepted Answer

@#IMG-DLM& b Divisio

Question 4

An activity base is used to charge service department expenses.Match each of the following activity bases with the appropriate department a-h.
-Number of work orders

Accepted Answer

A) Purchasing 
B) Payroll accounting 
C) Human resources 
D) Maintenance 
E) Information systems
F)Marketing
G)President's Office
H)Transportation 
A) Purchasing 
B) Payroll accounting 
C) Human resources 
D) Maintenance 
E) Information systems
F)Marketing
G)President's Office
H)Transportation

Question 5

A responsibility center in which the department manager has responsibility for and authority over costs and revenues is called an

Accepted Answer

A) profit center 
B) investment center 
C) volume center 
D) cost center 
A) profit center 
B) investment center 
C) volume center 
D) cost center

Question 6

Which of the following is not a commonly used approach to setting transfer prices?

Accepted Answer

A) market price approach 
B) revenue price approach 
C) negotiated price approach 
D) cost price approach 
A) market price approach 
B) revenue price approach 
C) negotiated price approach 
D) cost price approach

Question 7

The minimum acceptable divisional income from operations is set by top management by establishing a minimum rate of return considered acceptable for invested assets.

Accepted Answer

A) True 
 B)False

Question 8

Purchase requisitions for Purchasing and the number of payroll checks for Payroll Accounting are examples of activity bases.

Accepted Answer

A) True 
 B)False

Question 9

What is the investment turnover?

Accepted Answer

A) 16.0 
B) 3.05 
C) 0.33 
D) 27.5 
A) 16.0 
B) 3.05 
C) 0.33 
D) 27.5

Question 10

Which of the following is not a disadvantage of decentralized operation?

Accepted Answer

A) competition among managers 
B) duplication of operations 
C) price cutting by departments that are competing in the same product market 
D) top management freed from everyday tasks to do strategic planning 
A) competition among managers 
B) duplication of operations 
C) price cutting by departments that are competing in the same product market 
D) top management freed from everyday tasks to do strategic planning

Question 11

Under the negotiated price approach, the transfer price is the price at which the product or service transferred could be sold to outside buyers.

Accepted Answer

A) True 
 B)False

Question 12

In a profit center, the department manager has responsibility for and the authority to make decisions that affect

Accepted Answer

A) not only costs and revenues, but also assets invested in the center 
B) the assets invested in the center, but not costs and revenues 
C) both costs and revenues for the department or division 
D) costs and assets invested in the center, but not revenues 
A) not only costs and revenues, but also assets invested in the center 
B) the assets invested in the center, but not costs and revenues 
C) both costs and revenues for the department or division 
D) costs and assets invested in the center, but not revenues

Question 13

The following financial information was summarized from the accounting records of Buddy Corporation for the current year ended December 31:
   Calculate:
a The gross profit for the Dalmatian Division.
b The income from operations from the Dalmatian Division.
c The gross profit for the Beagle Division.
d The income from operations from the Beagle Division.
e The net income for the Buddy Corporation.

Accepted Answer

The answer of The following financial information was summarized from...

Question 14

Under the cost price approach, the transfer price is the price at which the product or service transferred could be sold to outside buyers.

Accepted Answer

A) True 
 B)False

Question 15

An activity base is used to charge service department expenses.Match each of the following activity bases with the appropriate department a-h.
-Allocated equally among divisions

Accepted Answer

A) Purchasing 
B) Payroll accounting 
C) Human resources 
D) Maintenance 
E) Information systems
F)Marketing
G)President's Office
H)Transportation 
A) Purchasing 
B) Payroll accounting 
C) Human resources 
D) Maintenance 
E) Information systems
F)Marketing
G)President's Office
H)Transportation

Question 16

Depreciation expense on store equipment for a department store is an indirect expense.

Accepted Answer

A) True 
 B)False

Question 17

What additional information is needed to calculate the rate of return on investment if income from operations is known?

Accepted Answer

A) invested assets 
B) residual income 
C) direct expenses 
D) sales 
A) invested assets 
B) residual income 
C) direct expenses 
D) sales

Question 18

How much will Square Yard Products total income from operations increase?

Accepted Answer

A) $32,000 
B) $112,000 
C) $80,000 
D) $150,000 
A) $32,000 
B) $112,000 
C) $80,000 
D) $150,000

Question 19

In rate of return on investment analysis, the investment turnover component focuses on efficiency in the use of assets and indicates the rate at which sales are being generated for each dollar of invested assets.

Accepted Answer

A) True 
 B)False

Question 20

Controllable expenses are those that can be influenced by the decisions of the profit center management.

Accepted Answer

A) True 
 B)False

A manager is responsible for costs only in an

Responsibility accounting reports that are given to lower level managers are usually very detailed, in turn, higher level managers will be given a summary report.

An activity base is used to charge service department expenses.Match each of the following activity bases with the appropriate department a-h. -Number of work orders

A responsibility center in which the department manager has responsibility for and authority over costs and revenues is called an

Which of the following is not a commonly used approach to setting transfer prices?

The minimum acceptable divisional income from operations is set by top management by establishing a minimum rate of return considered acceptable for invested assets.

Purchase requisitions for Purchasing and the number of payroll checks for Payroll Accounting are examples of activity bases.

What is the investment turnover?

Which of the following is not a disadvantage of decentralized operation?

Under the negotiated price approach, the transfer price is the price at which the product or service transferred could be sold to outside buyers.

In a profit center, the department manager has responsibility for and the authority to make decisions that affect

Under the cost price approach, the transfer price is the price at which the product or service transferred could be sold to outside buyers.

An activity base is used to charge service department expenses.Match each of the following activity bases with the appropriate department a-h. -Allocated equally among divisions

Depreciation expense on store equipment for a department store is an indirect expense.

What additional information is needed to calculate the rate of return on investment if income from operations is known?

How much will Square Yard Products total income from operations increase?

In rate of return on investment analysis, the investment turnover component focuses on efficiency in the use of assets and indicates the rate at which sales are being generated for each dollar of invested assets.

Controllable expenses are those that can be influenced by the decisions of the profit center management.

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

A manager is responsible for costs only in an

Responsibility accounting reports that are given to lower level managers are usually very detailed, in turn, higher level managers will be given a summary report.

An activity base is used to charge service department expenses.Match each of the following activity bases with the appropriate department a-h. -Number of work orders

A responsibility center in which the department manager has responsibility for and authority over costs and revenues is called an

Which of the following is not a commonly used approach to setting transfer prices?

The minimum acceptable divisional income from operations is set by top management by establishing a minimum rate of return considered acceptable for invested assets.

Purchase requisitions for Purchasing and the number of payroll checks for Payroll Accounting are examples of activity bases.

What is the investment turnover?

Which of the following is not a disadvantage of decentralized operation?

Under the negotiated price approach, the transfer price is the price at which the product or service transferred could be sold to outside buyers.

In a profit center, the department manager has responsibility for and the authority to make decisions that affect

Under the cost price approach, the transfer price is the price at which the product or service transferred could be sold to outside buyers.

An activity base is used to charge service department expenses.Match each of the following activity bases with the appropriate department a-h. -Allocated equally among divisions

Depreciation expense on store equipment for a department store is an indirect expense.

What additional information is needed to calculate the rate of return on investment if income from operations is known?

How much will Square Yard Products total income from operations increase?

In rate of return on investment analysis, the investment turnover component focuses on efficiency in the use of assets and indicates the rate at which sales are being generated for each dollar of invested assets.

Controllable expenses are those that can be influenced by the decisions of the profit center management.

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