Question 1

Which of the following is a key performance indicator of the customer perspective in a balanced scorecard?

Accepted Answer

A)  defect rate 
B)  employee satisfaction 
C)  gross margin growth 
D)  number of repeat customers 
A)  defect rate 
B)  employee satisfaction 
C)  gross margin growth 
D)  number of repeat customers

Question 2

Discuss the difference between a centralized company and a decentralized company.

Accepted Answer

In a small company,the owner or top mana

Question 3

Bag Ladies,Inc.manufactures two kinds of bags-totes and satchels.The company allocates manufacturing overhead using a single plantwide rate with direct labor cost as the allocation base.Estimated overhead costs for the year are $25,500.Additional estimated information is given below. $$\begin{array} { | l | r | r | } 
\hline & \text { Totes } & \text { Satchels } \
\hline \text { Direct materials cost per unit } & \$ 35 & \$ 45 \
\hline \text { Direct labor cost per unit } & \$ 51 & \$ 64 \
\hline \text { Number of units } & 530 & 350 \
\hline
\end{array}$$ Calculate the amount of overhead to be allocated to Totes.(Round any percentages to two decimal places and your final answer to the nearest dollar.)

Accepted Answer

A)  $500 
B)  $330 
C)  $11,556 
D)  $13,945 
A)  $500 
B)  $330 
C)  $11,556 
D)  $13,945

Question 4

Explain the difference between a controllable and a noncontrollable cost.

Accepted Answer

A controllable cost is one the

Question 5

Activity-based costing (ABC)focuses on the costs of activities when allocating indirect costs to products and services.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is a responsibility that is common to the managers of cost,profit,and investment centers?

Accepted Answer

A)  generating revenues 
B)  generating profits 
C)  managing the invested capital 
D)  controlling costs 
A)  generating revenues 
B)  generating profits 
C)  managing the invested capital 
D)  controlling costs

Question 7

To create goal congruence,some firms prefer calculating ROI based on the gross book value of asset.

Accepted Answer

A) True 
 B)False

Question 8

The return on investment of a company can be improved by either increasing average total assets or decreasing operating income.

Accepted Answer

A) True 
 B)False

Question 9

Sales revenue growth,gross margin growth,and return on investment are the key performance indicators for the ________.

Accepted Answer

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

Question 10

Which would be an appropriate cost driver for the warranty services activity?

Accepted Answer

A)  direct labor hours 
B)  number of service calls 
C)  number of purchase orders 
D)  number of batches 
A)  direct labor hours 
B)  number of service calls 
C)  number of purchase orders 
D)  number of batches

Question 11

Cost center responsibility reports typically focus on the flexible budget variance.

Accepted Answer

A) True 
 B)False

Question 12

If a company allows division managers to negotiate a cost-based transfer price,it is better to use actual costs rather than standard costs.Otherwise,the selling division has no motivation to control costs.

Accepted Answer

A) True 
 B)False

Question 13

The return on investment of a company is a measure of profitability and efficiency.

Accepted Answer

A) True 
 B)False

Question 14

Mathews Construction Materials Company has a sales office that sells concrete culvert pipes to property developers.The sales office is a revenue center and prepares a monthly responsibility report.The following information is provided.Complete the responsibility report.
Mathews Construction Materials Company
Revenue Center Responsibility Report
 $$\begin{array} { | l | r | r | r | r | r | } 
\hline  \text { Product Type } & \begin{array} { c } 
\text { Actual Sales } \
\text { Revenue }
\end{array} & \begin{array} { c } 
\text { Flexible } \
\text { Budget } \
\text { Variance }
\end{array} & \begin{array} { c } 
\text { Flexible } \
\text { Budget }
\end{array} & \begin{array} { c } 
\text { Sales Volume } \
\text { Variance }
\end{array} & \text { Static Budget } \
\hline 40 \text { inch } & \$ 31,700 & & \$ 30,500 & & \$ 40,800 \
\hline 36 \text { inch } & 40,150 & & 42,200 & & 33,000 \
\hline 32 \text { inch } & 19,100 & & 20,000 & & 28,450 \
\hline \text { Total } & & & & & \
\hline 
\end{array}$$

Accepted Answer

Mathews Construction Materials Company
R

Question 15

A cost center responsibility report ________.

Accepted Answer

A)  includes depreciation expense 
B)  typically focuses on the flexible budget variance 
C)  is the same as a performance report 
D)  shows all costs incurred by the department 
A)  includes depreciation expense 
B)  typically focuses on the flexible budget variance 
C)  is the same as a performance report 
D)  shows all costs incurred by the department

Question 16

Which of the following is a key performance indicator of the internal business perspective in a balanced scorecard?

Accepted Answer

A)  hours of employee training 
B)  number of warranty claims received 
C)  percentage of market share 
D)  return on investment 
A)  hours of employee training 
B)  number of warranty claims received 
C)  percentage of market share 
D)  return on investment

Question 17

Centralized operations are better for small companies due to the smaller scope of their operations.

Accepted Answer

A) True 
 B)False

Question 18

Uniox,Inc.intends to increase its profits by 50% in the next fiscal year.Which of the following is most likely to be a lag indicator in Uniox's performance report?

Accepted Answer

A)  return on investment 
B)  number of repeat customers 
C)  rate of on-time deliveries 
D)  defect rate 
A)  return on investment 
B)  number of repeat customers 
C)  rate of on-time deliveries 
D)  defect rate

Question 19

The following is divisional information for EVQ Enterprises:
 $$\begin{array} { | l | r | r | } 
\hline & \text { East Division } & \text { West Division } \
\hline \text { Operating income } & \$ 250,000 & \$ 200,000 \
\hline \text { Net sales } & 2,225,000 & 1,575,000 \
\hline \text { Total assets at Jan. 1 } & 1,500,000 & 840,000 \
\hline \text { Total assets at Dec .31 } & 1,200,000 & 1,000,000 \
\hline
\end{array}$$ The target rate of return is 12% for the East Division and is 10% for the West Division.
Compute the return on investment for each division.(Round to one decimal place.)

Accepted Answer

Average assets: (Beginning assets + Endi

Question 20

Responsibility accounting can help managers identify the causes of variances,thereby allowing them to determine what was controllable.

Accepted Answer

A) True 
 B)False

Which of the following is a key performance indicator of the customer perspective in a balanced scorecard?

Discuss the difference between a centralized company and a decentralized company.

Explain the difference between a controllable and a noncontrollable cost.

Activity-based costing (ABC)focuses on the costs of activities when allocating indirect costs to products and services.

Which of the following is a responsibility that is common to the managers of cost,profit,and investment centers?

To create goal congruence,some firms prefer calculating ROI based on the gross book value of asset.

The return on investment of a company can be improved by either increasing average total assets or decreasing operating income.

Sales revenue growth,gross margin growth,and return on investment are the key performance indicators for the ________.

Which would be an appropriate cost driver for the warranty services activity?

Cost center responsibility reports typically focus on the flexible budget variance.

If a company allows division managers to negotiate a cost-based transfer price,it is better to use actual costs rather than standard costs.Otherwise,the selling division has no motivation to control costs.

The return on investment of a company is a measure of profitability and efficiency.

A cost center responsibility report ________.

Which of the following is a key performance indicator of the internal business perspective in a balanced scorecard?

Centralized operations are better for small companies due to the smaller scope of their operations.

Uniox,Inc.intends to increase its profits by 50% in the next fiscal year.Which of the following is most likely to be a lag indicator in Uniox's performance report?

Responsibility accounting can help managers identify the causes of variances,thereby allowing them to determine what was controllable.

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

Which of the following is a key performance indicator of the customer perspective in a balanced scorecard?

Discuss the difference between a centralized company and a decentralized company.

Explain the difference between a controllable and a noncontrollable cost.

Activity-based costing (ABC)focuses on the costs of activities when allocating indirect costs to products and services.

Which of the following is a responsibility that is common to the managers of cost,profit,and investment centers?

To create goal congruence,some firms prefer calculating ROI based on the gross book value of asset.

The return on investment of a company can be improved by either increasing average total assets or decreasing operating income.

Sales revenue growth,gross margin growth,and return on investment are the key performance indicators for the ________.

Which would be an appropriate cost driver for the warranty services activity?

Cost center responsibility reports typically focus on the flexible budget variance.

If a company allows division managers to negotiate a cost-based transfer price,it is better to use actual costs rather than standard costs.Otherwise,the selling division has no motivation to control costs.

The return on investment of a company is a measure of profitability and efficiency.

A cost center responsibility report ________.

Which of the following is a key performance indicator of the internal business perspective in a balanced scorecard?

Centralized operations are better for small companies due to the smaller scope of their operations.

Uniox,Inc.intends to increase its profits by 50% in the next fiscal year.Which of the following is most likely to be a lag indicator in Uniox's performance report?

Responsibility accounting can help managers identify the causes of variances,thereby allowing them to determine what was controllable.

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