Exam 24: Cost Allocation and Responsibility Accounting

Key performance indicators (KPIs)are summary performance measures that help managers assess whether the company is achieving its goals.

Which of the following four perspectives of the balanced scorecard enables management to answer the question,"How can we continue to improve and create value?"

List two objectives in setting transfer prices.

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

Regardless of the type of responsibility center,responsibility reports should focus on information,not blame.

Management by exception directs management's attention to important differences between the actual and the budgeted amounts.

The balanced scorecard ________.

In selecting machine usage as the primary cost driver of overhead costs for the Production Department,management feels that there is a direct relationship between the number of machine hours used and the amount of overhead costs incurred.

Sandpiper Inc.has a division that manufactures a component that sells for $150 and has a variable cost of $50.Another division of the company wants to purchase the component.Fixed cost per unit of the component is $20.What is the minimum transfer price if the division is operating at capacity?

The balanced scorecard system requires management to consider ________.

Reliable Car Parts,a manufacturer of spare parts,has two production departments-Assembling and Packaging.The Assembling Department is mechanized,while the Packaging Department is labor oriented.Estimated manufacturing overhead costs for the year were $15,100,000 for Assembling and $10,500,000 for Packaging.Calculate the department predetermined overhead allocation rates for the Assembling and Packaging Departments,respectively,if the total estimated machine hours were 45,000 and labor hours were 22,000 for the year.(Round your answer to the nearest cent.)

Evergreen Corporation has two major divisions: Agricultural Products and Industrial Products.It provides the following information for the year. Agriculture Division Industrial Division Net sales \ 140,000 \ 1,000,000 Operating income \ 17,200 \ 218,000 Average assets \ 310,000 \ 5,500,000 Calculate the profit margin ratio for the Industrial Division of the company.(Round your answer to two decimal places.)

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

The term goal congruence refers to the ________.

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?

Consider the following key performance indicators,and classify each indicator according to the balanced scorecard perspective it addresses.Choose from: 1 - financial perspective 2 - customer perspective 3 - internal business perspective 4 - learning and growth perspective a.Customer retention b.Employee satisfaction ratings c.New product development time d.Cash flow from operations e.Percentage of compensation based on performance f.Earnings growth g.Average machine set-up time h.Employee promotion rate i.Residual income j.Percentage of orders filled each week

The performance reports of ________ contain actual and budgeted information on both their revenues and costs.

Fidelity Stereo Company has provided the following information regarding its activity-based costing system: Purchasing department costs are allocated based on purchase orders, and the predetermined overhead allocation rate is $\$ 77$ per purchase order. Assembly department costs are allocated based on the number of parts used, and the predetermined overhead allocation rate is $\$ 5$ per part. Packaging department costs are allocated based on the number of units produced, and the predetermined overhead allocation rate is $\$ 4$ per unit produced. Each stereo produced has 50 parts,and the direct materials cost per unit is $70.There are no direct labor costs.Fidelity Stereo has an order for 1200 stereos,which will require 45 purchase orders in all.What is the total cost for the 1200 stereos?

An activity-based costing system is developed in four steps: a.Compute the predetermined overhead allocation rate for each activity. B.Identify activities and estimate their total indirect costs. C.Identify the allocation base for each activity and estimate the total quantity of each allocation base. D.Allocate indirect costs to the cost object. Which of the following is the correct order for performing these steps?

The internal business perspective of the balanced scorecard is concerned with ________.