Question 1

The profit margin for Mason is

Accepted Answer

A)  7.1% 
B)  20% 
C)  15.2% 
D)  14.1% 
A)  7.1% 
B)  20% 
C)  15.2% 
D)  14.1%

Question 2

Responsibility accounting reports for profit centers are normally in the form of income statements.

Accepted Answer

A) True 
 B)False

Question 3

The rates at which centralized services are charged to each division are called service department charge rates.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following formulas is the investment turnover factor as used in determining the rate of return on investment?

Accepted Answer

A)  Invested assets / Sales 
B)  Income from operations / Invested assets 
C)  Income from operations / Sales 
D)  Sales / Invested assets 
A)  Invested assets / Sales 
B)  Income from operations / Invested assets 
C)  Income from operations / Sales 
D)  Sales / Invested assets

Question 5

If income from operations for a division is $30,000,sales are $263,750,and invested assets are $187,500,the investment turnover is 1.3.

Accepted Answer

A) True 
 B)False

Question 6

The transfer price approach that uses a variety of cost concepts is the

Accepted Answer

A)  negotiated price approach 
B)  standard cost approach 
C)  cost price approach 
D)  market price approach 
A)  negotiated price approach 
B)  standard cost approach 
C)  cost price approach 
D)  market price approach

Question 7

The ratio of sales to invested assets is termed the investment turnover component of the rate of return on investment.

Accepted Answer

A) True 
 B)False

Question 8

What is the service department charge rate for the Accounting Department?

Accepted Answer

A)  $714 
B)  $250 
C)  $625 
D)  $0.004 
A)  $714 
B)  $250 
C)  $625 
D)  $0.004

Question 9

Which of the following is a measure of a manager's performance working in a profit center?

Accepted Answer

A)  a balance sheet 
B)  the rate of return and residual income measures 
C)  a budget performance report 
D)  the divisional income statements 
A)  a balance sheet 
B)  the rate of return and residual income measures 
C)  a budget performance report 
D)  the divisional income statements

Question 10

In a profit center,the manager has responsibility and authority for making decisions that affect

Accepted Answer

A)  long-term liabilities 
B)  assets 
C)  investments 
D)  costs 
A)  long-term liabilities 
B)  assets 
C)  investments 
D)  costs

Question 11

What is the service department charge rate for the Personnel Department?

Accepted Answer

A)  $2,758 
B)  $3,200 
C)  $3,077 
D)  $1,000 
A)  $2,758 
B)  $3,200 
C)  $3,077 
D)  $1,000

Question 12

What is the profit margin?

Accepted Answer

A)  33.3% 
B)  5.2% 
C)  16.0% 
D)  19.1% 
A)  33.3% 
B)  5.2% 
C)  16.0% 
D)  19.1%

Question 13

Which of the following would not be considered an internal centralized service department?

Accepted Answer

A)  Payroll Accounting Department 
B)  Manufacturing Department 
C)  Information Systems Department 
D)  Purchasing Department 
A)  Payroll Accounting Department 
B)  Manufacturing Department 
C)  Information Systems Department 
D)  Purchasing Department

Question 14

The minimum acceptable divisional income from operations is set by top management by establishing a minimum rate of return considered acceptable for invested assets.

Accepted Answer

A) True 
 B)False

Question 15

What is Clydesdale Company's profit margin?

Accepted Answer

A)  20% 
B)  80% 
C)  44.4% 
D)  18% 
A)  20% 
B)  80% 
C)  44.4% 
D)  18%

Question 16

What is the investment turnover?

Accepted Answer

A)  16.0 
B)  3.05 
C)  0.33 
D)  27.5 
A)  16.0 
B)  3.05 
C)  0.33 
D)  27.5

Question 17

Controllable expenses are those that can be influenced by the decisions of the profit center management.

Accepted Answer

A) True 
 B)False

Question 18

Managers of what type of decentralized units have authority and responsibility for revenues,costs,and assets invested in the unit?

Accepted Answer

A)  profit center 
B)  investment center 
C)  production center 
D)  cost center 
A)  profit center 
B)  investment center 
C)  production center 
D)  cost center

Question 19

The investment turnover for Chicks is

Accepted Answer

A)  1.3 
B)  1.5 
C)  1.0 
D)  1.1 
A)  1.3 
B)  1.5 
C)  1.0 
D)  1.1

Question 20

What will the income of the Super Division be after all service department allocations?

Accepted Answer

A)  $300,000 
B)  $325,000 
C)  $550,000 
D)  $200,000 
A)  $300,000 
B)  $325,000 
C)  $550,000 
D)  $200,000

Exam 23: Evaluating Decentralized Operations

The profit margin for Mason is

Responsibility accounting reports for profit centers are normally in the form of income statements.

The rates at which centralized services are charged to each division are called service department charge rates.

Which of the following formulas is the investment turnover factor as used in determining the rate of return on investment?

If income from operations for a division is $30,000,sales are $263,750,and invested assets are $187,500,the investment turnover is 1.3.

The transfer price approach that uses a variety of cost concepts is the

The ratio of sales to invested assets is termed the investment turnover component of the rate of return on investment.

What is the service department charge rate for the Accounting Department?

Which of the following is a measure of a manager's performance working in a profit center?

In a profit center,the manager has responsibility and authority for making decisions that affect

What is the service department charge rate for the Personnel Department?

What is the profit margin?

Which of the following would not be considered an internal centralized service department?

The minimum acceptable divisional income from operations is set by top management by establishing a minimum rate of return considered acceptable for invested assets.

What is Clydesdale Company's profit margin?

What is the investment turnover?

Controllable expenses are those that can be influenced by the decisions of the profit center management.

Managers of what type of decentralized units have authority and responsibility for revenues,costs,and assets invested in the unit?

The investment turnover for Chicks is

What will the income of the Super Division be after all service department allocations?

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Current,installment Notes,and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, stock Transactions, and Dividends

Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity-Based Costing

Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Evaluating Variances From Standard Costs

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

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