Question 1

The formula for the rate of return on investment is

Accepted Answer

A) Invested assets/Income from operations 
B) Sales/Invested assets 
C) Income from operations/Sales 
D) Income from operations/Invested assets 
A) Invested assets/Income from operations 
B) Sales/Invested assets 
C) Income from operations/Sales 
D) Income from operations/Invested assets

Question 2

Managers of what type of decentralized units have authority and responsibility for revenues, costs, and assets invested in the unit?

Accepted Answer

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

Question 3

The balanced scorecard is a set of financial and nonfinancial measures that reflect the performance of the business.

Accepted Answer

A) True 
 B)False

Question 4

Which transfer price approach is used when the transfer price is set at the amount sold to outside buyers?

Accepted Answer

A) market price 
B) cost price 
C) negotiated price 
D) variable price 
A) market price 
B) cost price 
C) negotiated price 
D) variable price

Question 5

What is the service department charge rate for the Personnel Department?

Accepted Answer

A) $2,758 
B) $3,200 
C) $3,077 
D) $1,000 
A) $2,758 
B) $3,200 
C) $3,077 
D) $1,000

Question 6

To calculate income from operations, total service department charges are

Accepted Answer

A) added to income from operations before service department charges 
B) subtracted from operating expenses 
C) subtracted from income from operations before service department charges 
D) subtracted from gross profit margin 
A) added to income from operations before service department charges 
B) subtracted from operating expenses 
C) subtracted from income from operations before service department charges 
D) subtracted from gross profit margin

Question 7

Responsibility accounting reports for profit centers are normally in the form of income statements.

Accepted Answer

A) True 
 B)False

Question 8

Investment centers differ from profit centers in that they

Accepted Answer

A) are responsible for net income only 
B) are able to invest in assets 
C) have less responsibilities than cost centers and profit centers 
D) are only responsible for revenues 
A) are responsible for net income only 
B) are able to invest in assets 
C) have less responsibilities than cost centers and profit centers 
D) are only responsible for revenues

Question 9

The cost price approach for transfer pricing is most often used between responsibility centers organized as cost centers that are not concerned with the revenue.

Accepted Answer

A) True 
 B)False

Question 10

Property tax expense for a department store's store equipment is an example of a direct expense.

Accepted Answer

A) True 
 B)False

Question 11

A responsibility center in which the department manager is responsible for costs, revenues, and assets for a department is called:

Accepted Answer

A) a cost center 
B) a profit center 
C) an operating center 
D) an investment center 
A) a cost center 
B) a profit center 
C) an operating center 
D) an investment center

Question 12

Office salaries expense for a department store is an indirect expense.

Accepted Answer

A) True 
 B)False

Question 13

What is the service department charge rate for Graphics Production?

Accepted Answer

A) $2.00 
B) $10.00 
C) $6.66 
D) $0.50 
A) $2.00 
B) $10.00 
C) $6.66 
D) $0.50

Question 14

What is Clydesdale Company's profit margin?

Accepted Answer

A) 20% 
B) 80% 
C) 44.4% 
D) 18% 
A) 20% 
B) 80% 
C) 44.4% 
D) 18%

Question 15

Businesses that are separated into two or more manageable units in which managers have authority and responsibility for operations are said to be

Accepted Answer

A) decentralized 
B) consolidated 
C) diversified 
D) centralized 
A) decentralized 
B) consolidated 
C) diversified 
D) centralized

Question 16

If divisional income from operations is $100,000, invested assets are $850,000, and the minimum rate of return on invested assets is 8%, the residual income is $68,000.

Accepted Answer

A) True 
 B)False

Question 17

Service department charges are similar to the expenses of a profit center that purchased services from a source outside the company.

Accepted Answer

A) True 
 B)False

Question 18

If income from operations for a division is $6,000, invested assets are $25,000, and sales are $30,000, the investment turnover is 1.2.

Accepted Answer

A) True 
 B)False

Question 19

The Southern Division of Knucklehead Company has a rate of return on investment of 15% and an investment turnover of 1.2.What is the profit margin?

Accepted Answer

A) 1.5% 
B) 12.5% 
C) 0.67% 
D) 6.67% 
A) 1.5% 
B) 12.5% 
C) 0.67% 
D) 6.67%

Question 20

Xang Company's costs were over budget by $46,000.The Xang Company is divided in two regions.The first region's costs were over budget by $7,000.
Determine the amount that the second region's cost was over or under budget.

Accepted Answer

$46,000 -

The formula for the rate of return on investment is

Managers of what type of decentralized units have authority and responsibility for revenues, costs, and assets invested in the unit?

The balanced scorecard is a set of financial and nonfinancial measures that reflect the performance of the business.

Which transfer price approach is used when the transfer price is set at the amount sold to outside buyers?

What is the service department charge rate for the Personnel Department?

To calculate income from operations, total service department charges are

Responsibility accounting reports for profit centers are normally in the form of income statements.

Investment centers differ from profit centers in that they

The cost price approach for transfer pricing is most often used between responsibility centers organized as cost centers that are not concerned with the revenue.

Property tax expense for a department store's store equipment is an example of a direct expense.

A responsibility center in which the department manager is responsible for costs, revenues, and assets for a department is called:

Office salaries expense for a department store is an indirect expense.

What is the service department charge rate for Graphics Production?

What is Clydesdale Company's profit margin?

Businesses that are separated into two or more manageable units in which managers have authority and responsibility for operations are said to be

If divisional income from operations is $100,000, invested assets are $850,000, and the minimum rate of return on invested assets is 8%, the residual income is $68,000.

Service department charges are similar to the expenses of a profit center that purchased services from a source outside the company.

If income from operations for a division is $6,000, invested assets are $25,000, and sales are $30,000, the investment turnover is 1.2.

The Southern Division of Knucklehead Company has a rate of return on investment of 15% and an investment turnover of 1.2.What is the profit margin?

Xang Company's costs were over budget by $46,000.The Xang Company is divided in two regions.The first region's costs were over budget by $7,000. Determine the amount that the second region's cost was over or under budget.

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 formula for the rate of return on investment is

Managers of what type of decentralized units have authority and responsibility for revenues, costs, and assets invested in the unit?

The balanced scorecard is a set of financial and nonfinancial measures that reflect the performance of the business.

Which transfer price approach is used when the transfer price is set at the amount sold to outside buyers?

What is the service department charge rate for the Personnel Department?

To calculate income from operations, total service department charges are

Responsibility accounting reports for profit centers are normally in the form of income statements.

Investment centers differ from profit centers in that they

The cost price approach for transfer pricing is most often used between responsibility centers organized as cost centers that are not concerned with the revenue.

Property tax expense for a department store's store equipment is an example of a direct expense.

A responsibility center in which the department manager is responsible for costs, revenues, and assets for a department is called:

Office salaries expense for a department store is an indirect expense.

What is the service department charge rate for Graphics Production?

What is Clydesdale Company's profit margin?

Businesses that are separated into two or more manageable units in which managers have authority and responsibility for operations are said to be

If divisional income from operations is $100,000, invested assets are $850,000, and the minimum rate of return on invested assets is 8%, the residual income is $68,000.

Service department charges are similar to the expenses of a profit center that purchased services from a source outside the company.

If income from operations for a division is $6,000, invested assets are $25,000, and sales are $30,000, the investment turnover is 1.2.

The Southern Division of Knucklehead Company has a rate of return on investment of 15% and an investment turnover of 1.2.What is the profit margin?

Xang Company's costs were over budget by $46,000.The Xang Company is divided in two regions.The first region's costs were over budget by $7,000. Determine the amount that the second region's cost was over or under budget.

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