Question 1

Return on investment (ROI)is the most common measure of performance for a revenue centre.

Accepted Answer

A) True 
 B)False

Question 2

$$\begin{array} { l l } 
\text { Operating income } & \$ 60,000 \
\text { Sales } & \$ 240,000 \
\text { Beginning operating assets } & \$ 440,000 \
\text { Ending operating assets } & \$ 450,000
\end{array}$$
-Refer to the Figure.What was Condor's margin last year?

Accepted Answer

A)  0.10 
B)  0.16 
C)  0.25 
D)  0.50 
A)  0.10 
B)  0.16 
C)  0.25 
D)  0.50

Question 3

What is Strategy?

Accepted Answer

Strategy is defined as choosing the mark

Question 4

Refer to the Figure.Calculate the following: A. Conversion cost in minutes
B. Theoretical conversion cost per unit
C. Actual conversion cost per unit
D. How much more is the department spending per application than it should be if perfect efficiency could be attained?

Accepted Answer

The answer of Refer to the Figure.Calculate the following: A....

Question 5

What is the decision-making approach that allows managers at lower levels to make and implement key decisions pertaining to their areas of responsibility?

Accepted Answer

A)  responsibility accounting 
B)  controllable accounting 
C)  decentralization 
D)  optimal strategic accounting 
A)  responsibility accounting 
B)  controllable accounting 
C)  decentralization 
D)  optimal strategic accounting

Question 6

Which Balanced Scorecard perspective details the economic consequences of actions taken in the other three perspectives?

Accepted Answer

A)  the customer perspective 
B)  the process perspective 
C)  the learning and growth perspective 
D)  the financial perspective 
A)  the customer perspective 
B)  the process perspective 
C)  the learning and growth perspective 
D)  the financial perspective

Question 7

Turnover is the ratio of operating income to sales.

Accepted Answer

A) True 
 B)False

Question 8

The practice of delegating decision-making authority to lower levels of management in a company is called centralization.

Accepted Answer

A) True 
 B)False

Question 9

The market price is always the best transfer pricing policy.

Accepted Answer

A) True 
 B)False

Question 10

Suppose the selling division is operating at less than full capacity.Where would the floor of the bargaining range most probably be set at?

Accepted Answer

A)  the market price 
B)  the full manufacturing cost 
C)  the average price of all products sold by the selling division 
D)  the variable cost of manufacturing 
A)  the market price 
B)  the full manufacturing cost 
C)  the average price of all products sold by the selling division 
D)  the variable cost of manufacturing

Question 11

What is the best transfer price when the transferred product has a competitive outside market?

Accepted Answer

A)  the cost-based price 
B)  the negotiated price 
C)  the market price 
D)  the price set by central management 
A)  the cost-based price 
B)  the negotiated price 
C)  the market price 
D)  the price set by central management

Question 12

Which of the following performance measures uses after-tax operating income and the actual cost of capital employed?

Accepted Answer

A)  return on investment (ROI) 
B)  residual income 
C)  economic value added (EV
A)  
D)  margin 
A)  return on investment (ROI) 
B)  residual income 
C)  economic value added (EV
A)  
D)  margin

Question 13

$\begin{array}{ll}
\text { Sales } & \$ 100,000 \
\text { Operating income } & \$ 30,000 \
\text { Operating assets } & \$ 200,000
\end{array}$
-Refer to the Figure.What is the residual income for Gamma Division without the additional investment?

Accepted Answer

A)  $4,200 
B)  $6,000 
C)  $6,600 
D)  $24,000 
A)  $4,200 
B)  $6,000 
C)  $6,600 
D)  $24,000

Question 14

How is turnover calculated?

Accepted Answer

A)  operating income / average operating assets 
B)  average operating assets / operating income 
C)  operating income / sales 
D)  sales / average operating assets 
A)  operating income / average operating assets 
B)  average operating assets / operating income 
C)  operating income / sales 
D)  sales / average operating assets

Question 15

Why can the level of the transfer price affect the overall company?

Accepted Answer

A)  The higher the transfer price,the higher the operating income. 
B)  It may affect the taxes paid by the multinational company. 
C)  The lower the transfer price,the lower the total costs. 
D)  It may affect the company's accounts receivable. 
A)  The higher the transfer price,the higher the operating income. 
B)  It may affect the taxes paid by the multinational company. 
C)  The lower the transfer price,the lower the total costs. 
D)  It may affect the company's accounts receivable.

Question 16

Economic value added (EVA)can be calculated by multiplying margin by turnover.

Accepted Answer

A) True 
 B)False

Question 17

What is the price the selling division charges for a component purchased by the buying division of the same company?

Accepted Answer

A)  transfer price 
B)  economic value added price 
C)  market price 
D)  cost-based price 
A)  transfer price 
B)  economic value added price 
C)  market price 
D)  cost-based price

Question 18

What does the process value chain consist of?

Accepted Answer

A)  value,operations,and objectives 
B)  satisfaction,innovation,and value 
C)  innovation,operations,and postsales service 
D)  design,production,and selling 
A)  value,operations,and objectives 
B)  satisfaction,innovation,and value 
C)  innovation,operations,and postsales service 
D)  design,production,and selling

Question 19

$\begin{array}{ll}
\text { Sales } & \$ 100,000 \
\text { Operating income } & \$ 30,000 \
\text { Operating assets } & \$ 200,000
\end{array}$
-Refer to the Figure.What will happen to Gamma Division if the manager invests in the additional project?

Accepted Answer

A)  If the manager invests in the additional project,ROI of the division will increase. 
B)  If the manager uses ROI to decide to invest,residual income of the project is less than the residual income of the division without the project; therefore,the project will be rejected. 
C)  If the manager invests in the project,average investment for Alpha Division will decrease. 
D)  If the manager invests in the additional project,residual income of the division will increase. 
A)  If the manager invests in the additional project,ROI of the division will increase. 
B)  If the manager uses ROI to decide to invest,residual income of the project is less than the residual income of the division without the project; therefore,the project will be rejected. 
C)  If the manager invests in the project,average investment for Alpha Division will decrease. 
D)  If the manager invests in the additional project,residual income of the division will increase.

Question 20

Economic value added is residual income with the cost of capital equal to which of the following?

Accepted Answer

A)  the firm's budgeted cost of capital 
B)  the firm's average cost of capital 
C)  the firm's standard cost of capital 
D)  the firm's actual cost of capital 
A)  the firm's budgeted cost of capital 
B)  the firm's average cost of capital 
C)  the firm's standard cost of capital 
D)  the firm's actual cost of capital

Return on investment (ROI)is the most common measure of performance for a revenue centre.

Operating income \ 60,000 Sales \ 240,000 Beginning operating assets \ 440,000 Ending operating assets \ 450,000 -Refer to the Figure.What was Condor's margin last year?

What is Strategy?

Refer to the Figure.Calculate the following: A. Conversion cost in minutes B. Theoretical conversion cost per unit C. Actual conversion cost per unit D. How much more is the department spending per application than it should be if perfect efficiency could be attained?

What is the decision-making approach that allows managers at lower levels to make and implement key decisions pertaining to their areas of responsibility?

Which Balanced Scorecard perspective details the economic consequences of actions taken in the other three perspectives?

Turnover is the ratio of operating income to sales.

The practice of delegating decision-making authority to lower levels of management in a company is called centralization.

The market price is always the best transfer pricing policy.

Suppose the selling division is operating at less than full capacity.Where would the floor of the bargaining range most probably be set at?

What is the best transfer price when the transferred product has a competitive outside market?

Which of the following performance measures uses after-tax operating income and the actual cost of capital employed?

Sales \ 100,000 Operating income \ 30,000 Operating assets \ 200,000 -Refer to the Figure.What is the residual income for Gamma Division without the additional investment?

How is turnover calculated?

Why can the level of the transfer price affect the overall company?

Economic value added (EVA)can be calculated by multiplying margin by turnover.

What is the price the selling division charges for a component purchased by the buying division of the same company?

What does the process value chain consist of?

Sales \ 100,000 Operating income \ 30,000 Operating assets \ 200,000 -Refer to the Figure.What will happen to Gamma Division if the manager invests in the additional project?

Economic value added is residual income with the cost of capital equal to which of the following?

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behaviour

Costvolumeprofit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing,and Inventory Management

Budgeting, production, cash, and Master Budget

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters

Exam 12: Performance Evaluation and Decentralization

Return on investment (ROI)is the most common measure of performance for a revenue centre.

Operating income \ 60,000 Sales \ 240,000 Beginning operating assets \ 440,000 Ending operating assets \ 450,000 -Refer to the Figure.What was Condor's margin last year?

What is Strategy?

Refer to the Figure.Calculate the following: A. Conversion cost in minutes B. Theoretical conversion cost per unit C. Actual conversion cost per unit D. How much more is the department spending per application than it should be if perfect efficiency could be attained?

What is the decision-making approach that allows managers at lower levels to make and implement key decisions pertaining to their areas of responsibility?

Which Balanced Scorecard perspective details the economic consequences of actions taken in the other three perspectives?

Turnover is the ratio of operating income to sales.

The practice of delegating decision-making authority to lower levels of management in a company is called centralization.

The market price is always the best transfer pricing policy.

Suppose the selling division is operating at less than full capacity.Where would the floor of the bargaining range most probably be set at?

What is the best transfer price when the transferred product has a competitive outside market?

Which of the following performance measures uses after-tax operating income and the actual cost of capital employed?

Sales \ 100,000 Operating income \ 30,000 Operating assets \ 200,000 -Refer to the Figure.What is the residual income for Gamma Division without the additional investment?

How is turnover calculated?

Why can the level of the transfer price affect the overall company?

Economic value added (EVA)can be calculated by multiplying margin by turnover.

What is the price the selling division charges for a component purchased by the buying division of the same company?

What does the process value chain consist of?

Sales \ 100,000 Operating income \ 30,000 Operating assets \ 200,000 -Refer to the Figure.What will happen to Gamma Division if the manager invests in the additional project?

Economic value added is residual income with the cost of capital equal to which of the following?

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behaviour

Costvolumeprofit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing,and Inventory Management

Budgeting, production, cash, and Master Budget

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters