Exam 22: Decentralization and Performance Measurement

A dairy allocates the cost of unprocessed milk to the production of milk,cream,butter and cheese.For the current period,unprocessed milk was purchased for $240,000,and the following quantities of product and sales revenues were produced. Price per Product Pounds Pound Milk 100,000 \ 0.90 Cheese 50,000 2.20 Butter 20,000 1.00 Cream 10,000 3.00 How much of the $240,000 cost should be allocated to milk?

A ______________________________ is the value used to record transfers of items between divisions of the same company.

A responsibility accounting performance report documents:

A joint cost of producing two products can be allocated between those products on the basis of the relative physical quantities of each product produced.

A company's Pacific division had sales of $15 billion,net income of $3 billion,and average invested assets of $4 billion.What is this division's investment turnover?

Which of the following is most likely to be considered a profit center?

A profit center:

A retail store has three departments,A,B,and C,each of which has four full-time employees.The store does general advertising that benefits all departments.Advertising expense totaled $90,000 for the current year,and departmental sales were: Department A \ 356,250 Department B 641,250 Department C 427,500 How much advertising expense should be allocated to each department?

Match the appropriate balanced scorecard perspectives (a)through (d)with the following measurements of performance: (a) Financial (b) Customer (c) Internal process (d) Innovation/learning __________ (1) Customer satisfaction rating __________ (2) Product costs __________ (3) Labor hours per order __________ (4) Cash flow __________ (5) Employee turnover __________ (6) Net income __________ (7) Cycle time __________ (8) Number of patents

A sawmill bought a shipment of logs for $40,000.When cut,the logs produced 1 million board feet of lumber in the following grades: Type 1 - 400,000 bd.ft.priced to sell at $0.12 per bd.ft. Type 2 - 400,000 bd.ft.priced to sell at $0.06 per bd.ft. Type 3 - 200,000 bd.ft.priced to sell at $0.04 per bd.ft. How much cost should be allocated to Type 1 and Type 2,respectively? Type1 Type 2 A. \ 16,000 \ 16,000 B. \ 13,333 \ 4,444 C. \ 40,000 \ 24,000 D. \ 24,000 \ 12,000 E. \2 4,000 \ 8,000

Reference: 22_02 Jamesway Corporation has two separate divisions that operate as profit centers. The following information is available for the most recent year: White Grey Division Division Sales (nat) \ 200,000 \ 400,000 Salary expense 28,000 48,000 Cost of goods sold 100,000 159,000 The White Division occupies 20,000 square feet in the plant. The Grey Division occupies 30,000 square feet. Rent is an indirect expense and is allocated based on square footage. Rent expense for the year was $50,000. -Grey Division's departmental income is:

Regardless of the system used in departmental cost analysis:

Which of the following is an example of a financial performance measure that would be found in a balanced scorecard?

A unit of a business that not only incurs costs but also generates revenues is called a:

The Footwear Department of Lee's Department Store had sales of $188,000,cost of goods sold of $132,500,indirect expenses of $13,250,and direct expenses of $27,500 for the current period.The Footwear Department's contribution to overhead as a percent of sales is:

Direct expenses must be allocated across departments.

Which of the following is an example of a performance measure of internal business processes that would be found in a balanced scorecard:

Cycle time is a financial measure commonly used to evaluate a company's production processes.

Reference: 22_06 Mach Co. operates three manufacturing departments as profit centers. The following information is available for its most recent year: Cost of Direct Indirect Dept. Sales Goods Sold Expenses Expenses 1 \ 1,000,000 \ 700,000 \ 100,000 \ 80,000 2 400,000 150,000 40,000 100,000 3 700,000 300,000 150,000 20,000 -Department 1's contribution to overhead as a percent of sales is: