Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

The manager of a revenue center is responsible for generating profits.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

A market-based transfer price considers the ________ when determining the transfer price.

Accepted Answer

A)  variable costs 
B)  sales price of goods 
C)  cost of the goods 
D)  contribution margin 
A)  variable costs 
B)  sales price of goods 
C)  cost of the goods 
D)  contribution margin

Question 5

Which of the following perspectives of the balanced scorecard focuses on the increase of company profits through increasing revenue growth and productivity?

Accepted Answer

A)  financial 
B)  customer 
C)  internal business 
D)  learning and growth 
A)  financial 
B)  customer 
C)  internal business 
D)  learning and growth

Question 6

Which of the following internal business perspective key performance indicators (KPIs)is commonly used to assess the innovation process?

Accepted Answer

A)  number of new products developed 
B)  number of warranty claims 
C)  employee turnover rate 
D)  rate of on-time deliveries 
A)  number of new products developed 
B)  number of warranty claims 
C)  employee turnover rate 
D)  rate of on-time deliveries

Question 7

Which of the following affects the company's ability to make on-time deliveries?

Accepted Answer

A)  return on investment 
B)  product's price 
C)  warranty claims 
D)  production cycle time 
A)  return on investment 
B)  product's price 
C)  warranty claims 
D)  production cycle time

Question 8

In a ________,the manager is responsible for generating revenues and controlling costs.

Accepted Answer

A)  cost center 
B)  profit center 
C)  revenue center 
D)  transfer pricing center 
A)  cost center 
B)  profit center 
C)  revenue center 
D)  transfer pricing center

Question 9

Define market-based transfer price.When should market-based transfer pricing be used? Explain your answer.

Accepted Answer

Market-based transfer price is a transfe

Question 10

Uncontrollable costs are the costs that can be influenced by the decisions of a manager.

Accepted Answer

A) True 
 B)False

Question 11

A furniture corporation manufactures two models of furniture-Standard and Deluxe.The total estimated manufacturing overhead costs are $64,350.The following estimates are available: $$\begin{array} { | l | r | r | } 
\hline & \text { Standard } & \text { Deluxe } \
\hline \text { Direct materials cost per unit } & \$ 240 & \$ 290 \
\hline \text { Direct labor cost per unit } & \$ 120 & \$ 140 \
\hline \text { Number of units } & 240 & 500 \
\hline
\end{array}$$ The company uses direct labor costs as the base to allocate manufacturing overhead.Calculate the predetermined overhead rate.(Round your answer to two decimal places.)

Accepted Answer

A)  31.76% 
B)  33.94% 
C)  191.52% 
D)  65.13% 
A)  31.76% 
B)  33.94% 
C)  191.52% 
D)  65.13%

Question 12

Activity-based management (ABM)focuses on the primary activities a business performs,determines the costs of the activities,and then uses the cost information to make decisions.

Accepted Answer

A) True 
 B)False

Question 13

Why is using a single plantwide predetermined overhead allocation rate not always accurate?

Accepted Answer

Using a single plantwide predetermined o

Question 14

Cost center responsibility reports generally focus on the static budget variance.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is not an advantage of decentralization?

Accepted Answer

A)  provides training 
B)  frees top management time 
C)  works to achieve goal congruence 
D)  supports the use of expert knowledge 
A)  provides training 
B)  frees top management time 
C)  works to achieve goal congruence 
D)  supports the use of expert knowledge

Question 16

Profit center responsibility reports include ________.

Accepted Answer

A)  revenues only 
B)  invested capital 
C)  both revenues and expenses 
D)  returns on investments 
A)  revenues only 
B)  invested capital 
C)  both revenues and expenses 
D)  returns on investments

Question 17

In a decentralized company,segment managers may not fully understand the big picture when making decisions.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following best describes the manager of a profit center?

Accepted Answer

A)  The manager is only responsible for controlling costs. 
B)  The manager is responsible for generating profits and efficiently managing the center's invested capital. 
C)  The manager is only responsible for generating revenues. 
D)  The manager is responsible for generating revenues and controlling costs. 
A)  The manager is only responsible for controlling costs. 
B)  The manager is responsible for generating profits and efficiently managing the center's invested capital. 
C)  The manager is only responsible for generating revenues. 
D)  The manager is responsible for generating revenues and controlling costs.

Question 19

The balanced scorecard is a performance evaluation system that requires management to consider financial measures of performance,but not nonfinancial measures.

Accepted Answer

A) True 
 B)False

Question 20

List the two factors that the financial evaluation of investment centers must measure.

Accepted Answer

1.How much operating income th

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

The manager of a revenue center is responsible for generating profits.

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

A market-based transfer price considers the ________ when determining the transfer price.

Which of the following perspectives of the balanced scorecard focuses on the increase of company profits through increasing revenue growth and productivity?

Which of the following internal business perspective key performance indicators (KPIs)is commonly used to assess the innovation process?

Which of the following affects the company's ability to make on-time deliveries?

In a ________,the manager is responsible for generating revenues and controlling costs.

Define market-based transfer price.When should market-based transfer pricing be used? Explain your answer.

Uncontrollable costs are the costs that can be influenced by the decisions of a manager.

Activity-based management (ABM)focuses on the primary activities a business performs,determines the costs of the activities,and then uses the cost information to make decisions.

Why is using a single plantwide predetermined overhead allocation rate not always accurate?

Cost center responsibility reports generally focus on the static budget variance.

Which of the following is not an advantage of decentralization?

Profit center responsibility reports include ________.

In a decentralized company,segment managers may not fully understand the big picture when making decisions.

Which of the following best describes the manager of a profit center?

The balanced scorecard is a performance evaluation system that requires management to consider financial measures of performance,but not nonfinancial measures.

List the two factors that the financial evaluation of investment centers must measure.

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Short-Term Business Decisions

Capital Investment Decisions

Filters

Exam 24: Cost Allocation and Responsibility Accounting

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

The manager of a revenue center is responsible for generating profits.

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

A market-based transfer price considers the ________ when determining the transfer price.

Which of the following perspectives of the balanced scorecard focuses on the increase of company profits through increasing revenue growth and productivity?

Which of the following internal business perspective key performance indicators (KPIs)is commonly used to assess the innovation process?

Which of the following affects the company's ability to make on-time deliveries?

In a ________,the manager is responsible for generating revenues and controlling costs.

Define market-based transfer price.When should market-based transfer pricing be used? Explain your answer.

Uncontrollable costs are the costs that can be influenced by the decisions of a manager.

Activity-based management (ABM)focuses on the primary activities a business performs,determines the costs of the activities,and then uses the cost information to make decisions.

Why is using a single plantwide predetermined overhead allocation rate not always accurate?

Cost center responsibility reports generally focus on the static budget variance.

Which of the following is not an advantage of decentralization?

Profit center responsibility reports include ________.

In a decentralized company,segment managers may not fully understand the big picture when making decisions.

Which of the following best describes the manager of a profit center?

The balanced scorecard is a performance evaluation system that requires management to consider financial measures of performance,but not nonfinancial measures.

List the two factors that the financial evaluation of investment centers must measure.

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Short-Term Business Decisions

Capital Investment Decisions

Filters