Question 1

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

Accepted Answer

A)  revenues 
B)  investments in assets 
C)  both costs and revenues 
D)  costs 
A)  revenues 
B)  investments in assets 
C)  both costs and revenues 
D)  costs

Question 2

A responsibility center in which the authority over and responsibility for costs and revenues is vested in the department manager is termed a profit center.

Accepted Answer

A) True 
 B)False

Question 3

In a profit center,the department manager has responsibility for and the authority to make decisions that affect

Accepted Answer

A)  not only costs and revenues,but also assets invested in the center 
B)  the assets invested in the center,but not costs and revenues 
C)  both costs and revenues for the department or division 
D)  costs and assets invested in the center,but not revenues 
A)  not only costs and revenues,but also assets invested in the center 
B)  the assets invested in the center,but not costs and revenues 
C)  both costs and revenues for the department or division 
D)  costs and assets invested in the center,but not revenues

Question 4

The plant managers in a cost center can be held responsible for major differences between budgeted and actual costs in their plants.

Accepted Answer

A) True 
 B)False

Question 5

Two divisions of Oregano Company (Divisions TX and OY)have the same profit margins.Division TX's investment turnover is larger than that of Division OY (1.2 to 1.0).Income from operations for Division TX is $55,000,and income from operations for Division OY is $43,000.Division TX has a higher return on investment than Division OY by

Accepted Answer

A)  using income from operations as a performance measure 
B)  comparing the profit margins 
C)  applying a negotiated price measure 
D)  using its assets more efficiently in generating sales 
A)  using income from operations as a performance measure 
B)  comparing the profit margins 
C)  applying a negotiated price measure 
D)  using its assets more efficiently in generating sales

Question 6

How much will Division 3's income from operations increase?

Accepted Answer

A)  $150,000 
B)  $50,000 
C)  $32,000 
D)  $72,000 
A)  $150,000 
B)  $50,000 
C)  $32,000 
D)  $72,000

Question 7

Central Division for Chemical Company has a rate of return on investment of 22% and an investment turnover of 1.4.What is the profit margin?

Accepted Answer

A)  20% 
B)  15.7% 
C)  14% 
D)  6.36% 
A)  20% 
B)  15.7% 
C)  14% 
D)  6.36%

Question 8

The underlying principle of allocating direct operating expenses to departments is to assign to each department an amount of expense proportional to the revenues of that department.

Accepted Answer

A) True 
 B)False

Question 9

The primary accounting tool for controlling and reporting for cost centers is a budget.

Accepted Answer

A) True 
 B)False

Question 10

What is the profit margin for Division A?

Accepted Answer

A)  11.1% 
B)  10.0% 
C)  9.0% 
D)  0.90% 
A)  11.1% 
B)  10.0% 
C)  9.0% 
D)  0.90%

Question 11

The following data are taken from the management accounting reports of Dulcimer Co.: ​
  If an incentive bonus is paid to the manager who achieved the highest income from operations before service department charges,it follows that

Accepted Answer

A)  Division A's manager is given the bonus 
B)  Division B's manager is given the bonus 
C)  Division C's manager is given the bonus 
D)  Divisions B and C's managers divide the bonus 
A)  Division A's manager is given the bonus 
B)  Division B's manager is given the bonus 
C)  Division C's manager is given the bonus 
D)  Divisions B and C's managers divide the bonus

Question 12

A manager is responsible for costs only in a(n)

Accepted Answer

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

Question 13

How much service department cost would be allocated to the Super Division?

Accepted Answer

A)  $350,000 
B)  $100,000 
C)  $125,000 
D)  $550,000 
A)  $350,000 
B)  $100,000 
C)  $125,000 
D)  $550,000

Question 14

The approach that required the transfer price to be less than the market price but greater than the supplying division's variable costs per unit is called the

Accepted Answer

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

Question 15

By using the rate of return on investment as a divisional performance measure,divisional managers will always be motivated to invest in proposals which will increase the overall rate of return for the company.

Accepted Answer

A) True 
 B)False

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

A responsibility center in which the authority over and responsibility for costs and revenues is vested in the department manager is termed a profit center.

In a profit center,the department manager has responsibility for and the authority to make decisions that affect

The plant managers in a cost center can be held responsible for major differences between budgeted and actual costs in their plants.

How much will Division 3's income from operations increase?

Central Division for Chemical Company has a rate of return on investment of 22% and an investment turnover of 1.4.What is the profit margin?

The underlying principle of allocating direct operating expenses to departments is to assign to each department an amount of expense proportional to the revenues of that department.

The primary accounting tool for controlling and reporting for cost centers is a budget.

What is the profit margin for Division A?

The following data are taken from the management accounting reports of Dulcimer Co.: If an incentive bonus is paid to the manager who achieved the highest income from operations before service department charges,it follows that

A manager is responsible for costs only in a(n)

How much service department cost would be allocated to the Super Division?

The approach that required the transfer price to be less than the market price but greater than the supplying division's variable costs per unit is called the

By using the rate of return on investment as a divisional performance measure,divisional managers will always be motivated to invest in proposals which will increase the overall rate of return for the company.

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

Filters

Exam 23: Evaluating Decentralized Operations

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

A responsibility center in which the authority over and responsibility for costs and revenues is vested in the department manager is termed a profit center.

In a profit center,the department manager has responsibility for and the authority to make decisions that affect

The plant managers in a cost center can be held responsible for major differences between budgeted and actual costs in their plants.

How much will Division 3's income from operations increase?

Central Division for Chemical Company has a rate of return on investment of 22% and an investment turnover of 1.4.What is the profit margin?

The underlying principle of allocating direct operating expenses to departments is to assign to each department an amount of expense proportional to the revenues of that department.

The primary accounting tool for controlling and reporting for cost centers is a budget.

What is the profit margin for Division A?

The following data are taken from the management accounting reports of Dulcimer Co.: ​ If an incentive bonus is paid to the manager who achieved the highest income from operations before service department charges,it follows that

A manager is responsible for costs only in a(n)

How much service department cost would be allocated to the Super Division?

The approach that required the transfer price to be less than the market price but greater than the supplying division's variable costs per unit is called the

By using the rate of return on investment as a divisional performance measure,divisional managers will always be motivated to invest in proposals which will increase the overall rate of return for the company.

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

Filters

The following data are taken from the management accounting reports of Dulcimer Co.: If an incentive bonus is paid to the manager who achieved the highest income from operations before service department charges,it follows that