Answer the following questions using the information below: The Cybertronics Corporation reported the following information for its Cyclotron Division: \[\begin{array} { l r } \text { Revenues } & \$ 2,000,000 \\ \text { Operating costs } & 1,200,000 \\ \text { Operating assets } & 1,000,000 \end{array}\] Income is defined as operating income. -What is the Cyclotron Division's return on sales?

A) 20% B) 40% C) 50% D) 60% A) 20% B) 40% C) 50% D) 60%

Answer the following questions using the information below: Carriage Incorporated manufactures horse carriages. The company has two divisions, Wheels and Assembly. Because of different accounting methods and inflation rates, the company is considering multiple evaluation measures. The following information is provided for 2015: \[\begin{array} { | l | r | r | r | r | } \hline & { \text { ASSETS } } && { \text { INCOME } } \\ \hline & \text { Book value } & \text { Current value } & \text { Book value } & \text { Current value } \\ \hline \text { Wheels } & \$ 485,000 & \$ 550,000 & \$ 120,000 & \$ 140,000 \\ \hline \text { Assembly } & \$ 750,000 & \$ 1,200,000 & \$ 160,000 & \$ 172,500 \\ \hline \end{array}\] The company is currently using a 12% required rate of return. -What are Wheels's and Assembly's return on investment based on book values,respectively?

A) 0.21; 0.25 B) 0.25; 0.21 C) 0.14; 0.25 D) 0.25; 0.14 A) 0.21; 0.25 B) 0.25; 0.21 C) 0.14; 0.25 D) 0.25; 0.14

Moto Corp allows its divisions to operate as autonomous units.The operating data for 2015 follow: \[\begin{array} { | l | r | r | r | } \hline & \text { Plows } & \text { Tractors } & \text { Combines } \\ \hline \text { Revenues } & \$ 2,250,000 & \$ 500,000 & \$ 4,800,000 \\ \hline \text { Accounts receivable } & 800,000 & 152,500 & 1,435,000 \\ \hline \text { Operating assets } & 1,000,000 & 400,000 & 1,750,000 \\ \hline \text { Net operating income } & 220,000 & 60,000 & 480,000 \\ \hline \text { Taxable income } & 165,000 & 90,000 & 385,000 \\ \hline \end{array}\] Required: a.Compute the investment turnover for each division. b.Compute the return on sales for each division. c.Compute the return on investment for each division. d.Which division manager is doing best? Why? e.What other factors should be included when evaluating the managers? For parts (b)and (c)income is defined as operating income.

The answer of Moto Corp allows its divisions to operate...

Batman Abstract Company has three divisions that operate autonomously.Their results for 2015 are as follows: \[\begin{array} { | l | r | r | r | } \hline & { \text { Riddler } } & { \text { Joker } } & { \text { Penguin } } \\ \hline \text { Sales } & \$ 5,000,000 & \$ 7,000,000 & \$ 10,000,000 \\ \hline \text { Contribution margin } & 1,440,000 & 1,700,000 & 3,500,000 \\ \hline \text { Pperating income } & 1,000,000 & 1,750,000 & 2,520,000 \\ \hline \text { Investment base } & 9,000,000 & 10,000,000 & 14,000,000 \\ \hline \end{array}\] The company's desired rate of return is 20%. Required: a.Compute each division's ROI. b.Compute each division's residual income. c.Rank each division by both ROI and residual income. d.Which division had the best performance in 2015? Why?

a. @#IMG-DLM& b. @#IMG-DLM& c.ROI Rank: Penguin # 1 Joker

Aeralia Inc.,has two regional offices.The data for each are as follows: \[\begin{array} { l r r } & \text { Maryland } & \text { New Jersey } \\ \text { Revenues } & \$ 290,000 & \$ 298,000 \\ \text { Operating assets } & 2,500,000 & 4,500,000 \\ \text { Net operating income } & 1,000,000 & 1,200,000 \end{array}\] What is the Maryland Division's return on investment?

A) 40% B) 54% C) 12% D) 3.57% A) 40% B) 54% C) 12% D) 3.57%

Exam 23: Performance Measurement, compensation, and Multinational Considerations

To calculate the value of fixed assets for an overseas branch,the historical rate of exchange is used for its conversion.

(True/False)

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Question 101

Boundary systems ________.

(Multiple Choice)

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Question 102

Briefly explain each of the four levels of control.Why does a company need to implement more than a diagnostic control system?

(Essay)

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Question 103

Answer the following questions using the information below: The Cybertronics Corporation reported the following information for its Cyclotron Division: Revenues \ 2,000,000 Operating costs 1,200,000 Operating assets 1,000,000 Income is defined as operating income. -What is the Cyclotron Division's return on sales?

(Multiple Choice)

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Question 104

Answer the following questions using the information below: Carriage Incorporated manufactures horse carriages. The company has two divisions, Wheels and Assembly. Because of different accounting methods and inflation rates, the company is considering multiple evaluation measures. The following information is provided for 2015: ASSETS INCOME Book value Current value Book value Current value Wheels \ 485,000 \ 550,000 \ 120,000 \ 140,000 Assembly \ 750,000 \ 1,200,000 \ 160,000 \ 172,500 The company is currently using a 12% required rate of return. -What are Wheels's and Assembly's return on investment based on book values,respectively?

(Multiple Choice)

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Question 105

Which of the following is true about designing an accounting-based performance measure?

(Multiple Choice)

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Question 106

Ventaz Corp.purchased assets for its overseas branch for $10,000.The rate of conversion at the time of purchase of asset was $1.306 / Euro.What is the value of assets after two years if the rate is $1.508 / Euro and the average rate being $1.407 / Euro?

(Multiple Choice)

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Question 107

Moto Corp allows its divisions to operate as autonomous units.The operating data for 2015 follow: Plows Tractors Combines Revenues \ 2,250,000 \ 500,000 \ 4,800,000 Accounts receivable 800,000 152,500 1,435,000 Operating assets 1,000,000 400,000 1,750,000 Net operating income 220,000 60,000 480,000 Taxable income 165,000 90,000 385,000 Required: a.Compute the investment turnover for each division. b.Compute the return on sales for each division. c.Compute the return on investment for each division. d.Which division manager is doing best? Why? e.What other factors should be included when evaluating the managers? For parts (b)and (c)income is defined as operating income.

(Essay)

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Question 108

Return on sales measures how effectively costs are managed.

(True/False)

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Question 109

Batman Abstract Company has three divisions that operate autonomously.Their results for 2015 are as follows: Riddler Joker Penguin Sales \ 5,000,000 \ 7,000,000 \ 10,000,000 Contribution margin 1,440,000 1,700,000 3,500,000 Pperating income 1,000,000 1,750,000 2,520,000 Investment base 9,000,000 10,000,000 14,000,000 The company's desired rate of return is 20%. Required: a.Compute each division's ROI. b.Compute each division's residual income. c.Rank each division by both ROI and residual income. d.Which division had the best performance in 2015? Why?

(Essay)

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Question 110

Companies are increasingly using nonfinancial measures to evaluate performance.Why? Since these numbers do not come from the company's financial records,why are they used?

(Essay)

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Question 111

Historical-cost-based accounting measures are usually inadequate for evaluating economic returns on new investments and,in some cases,create disincentives for expansion.

(True/False)

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Question 112

Return on investment is also known as the ________.

(Multiple Choice)

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Question 113

Bob's Cellular Phone Company uses ROI to measure divisional performance.Annual ROI calculations for each division have traditionally employed the ending amount of invested capital along with annual operating income and net revenue.The Dupont method is generally used.The company's Phone Accessories Division had the following results for the last two years: 2015 ROI = ($2,000,000/$20,000,000)× ($20,000,000/$10,000,000)= 0.20 2016 ROI = ($2,400,000/$25,000,000)× ($25,000,000/$15,000,000)= 0.16 Corporate management was disappointed in the performance of the division for 2016,since it had made an additional investment in the division that was budgeted for a 23% ROI. Required: a.Discuss some factors that may have contributed to the decrease in ROI for 2016. b.Would there have been any substantial difference if average capital had been used?

(Essay)

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Question 114

Aeralia Inc.,has two regional offices.The data for each are as follows: Maryland New Jersey Revenues \ 290,000 \ 298,000 Operating assets 2,500,000 4,500,000 Net operating income 1,000,000 1,200,000 What is the Maryland Division's return on investment?

(Multiple Choice)

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Question 115

Reducing the investment base involves decreasing idle cash,managing credit judiciously,determining proper inventory levels,and spending carefully on long-term assets.

(True/False)

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Question 116

An example of a performance measure with a long time horizon is ________.

(Multiple Choice)

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Question 117

The proponents of using net book value as an investment base maintain that it is less confusing because it is consistent with the amount of total assets shown in the conventional balance sheet.

(True/False)

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Question 118

The balanced scorecard in most organizations is broken down into the following categories: commercial perspective,supplier perspective,external business-process perspective,and productivity perspective.

(True/False)

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Question 119

All other things held constant,increase in assets such as receivables or decrease in operating income results in an increase in return on investment.

(True/False)

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Question 120

Showing 101 - 120 of 151

To calculate the value of fixed assets for an overseas branch,the historical rate of exchange is used for its conversion.

Boundary systems ________.

Briefly explain each of the four levels of control.Why does a company need to implement more than a diagnostic control system?

Which of the following is true about designing an accounting-based performance measure?

Ventaz Corp.purchased assets for its overseas branch for $10,000.The rate of conversion at the time of purchase of asset was $1.306 / Euro.What is the value of assets after two years if the rate is $1.508 / Euro and the average rate being $1.407 / Euro?

Return on sales measures how effectively costs are managed.

Companies are increasingly using nonfinancial measures to evaluate performance.Why? Since these numbers do not come from the company's financial records,why are they used?

Historical-cost-based accounting measures are usually inadequate for evaluating economic returns on new investments and,in some cases,create disincentives for expansion.

Return on investment is also known as the ________.

Aeralia Inc.,has two regional offices.The data for each are as follows: Maryland New Jersey Revenues \ 290,000 \ 298,000 Operating assets 2,500,000 4,500,000 Net operating income 1,000,000 1,200,000 What is the Maryland Division's return on investment?

Reducing the investment base involves decreasing idle cash,managing credit judiciously,determining proper inventory levels,and spending carefully on long-term assets.

An example of a performance measure with a long time horizon is ________.

The proponents of using net book value as an investment base maintain that it is less confusing because it is consistent with the amount of total assets shown in the conventional balance sheet.

The balanced scorecard in most organizations is broken down into the following categories: commercial perspective,supplier perspective,external business-process perspective,and productivity perspective.

All other things held constant,increase in assets such as receivables or decrease in operating income results in an increase in return on investment.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, direct-Cost Variances, and Management Control

Flexible Budgets, overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy, balanced Scorecard, and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, rework, and Scrap

Balanced Scorecard: Quality and Time

Inventory Management, just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, transfer Pricing, and Multinational Considerations

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