Question 1

The manager of the Midwest sales region at Pace Food would be in charge of a(n)

Accepted Answer

A)  cost centre. 
B)  investment centre. 
C)  profit centre. 
D)  revenue centre. 
A)  cost centre. 
B)  investment centre. 
C)  profit centre. 
D)  revenue centre.

Question 2

Use the information below to answer the following question(s):
Assume the Cell Phone Division of the First Electronics Corporation had the following results last year (in thousands). Management's target rate of return is 10% and the weighted average cost of capital is 7%. Its effective tax rate is 30%.
  
-What is the First Electronics Corporation cell phone division's Residual Income (RI)?

Accepted Answer

A)  $472,500 
B)  $600,000 
C)  $690,000 
D)  $300,000 
A)  $472,500 
B)  $600,000 
C)  $690,000 
D)  $300,000

Question 3

Cash flows from operations and gross margin growth would be examples of the

Accepted Answer

A)  financial perspective. 
B)  customer perspective. 
C)  internal business perspective. 
D)  learning and growth perspective. 
A)  financial perspective. 
B)  customer perspective. 
C)  internal business perspective. 
D)  learning and growth perspective.

Question 4

Rickett Company has operating income of $180,000. Its return on investment (ROI) is 30%, while its target rate of return is 12%. The total assets of Rickett Company would be closest to

Accepted Answer

A)  $21,600. 
B)  $54,000. 
C)  $600,000. 
D)  $1,500,000. 
A)  $21,600. 
B)  $54,000. 
C)  $600,000. 
D)  $1,500,000.

Question 5

Data on three unrelated companies are given in the following table.
   
Fill in the missing information.

Accepted Answer

@#IMG-DLM& Alpha Company computations: ^a OI ÷ S; $

Question 6

Use the information below to answer the following question(s):
The Tandem division of the Great Adventures Cycles Company had the following results last year (in thousands).
   
Management's target rate of return is 10% and the weighted average cost of capital is 8%. Tandem's effective tax rate is 35%.
-What is the Tandem division's asset turnover?

Accepted Answer

A)  2.0 
B)  4.2 
C)  8.3 
D)  13.3 
A)  2.0 
B)  4.2 
C)  8.3 
D)  13.3

Question 7

The Hotel Division of Treasure Island Corporation had the following results last year.
   Management's target rate of return is 14% and the weighted average cost of capital is 10%. Its effective tax rate is 35%.
Required:
1. Calculate the return on investment (ROI).
2. Calculate the residual income.
3. Calculate the Economic Value Added (EVA).

Accepted Answer

The answer of The Hotel Division of Treasure Island Corporation...

Question 8

The local McDonald's restaurant is likely to be considered to be an investment centre.

Accepted Answer

A) True 
 B)False

Question 9

Revenue centre performance reports often highlight both the flexible budget variance and the sales volume variance.

Accepted Answer

A) True 
 B)False

Question 10

Measures of the balanced scorecard's internal business process perspective include all of the following EXCEPT

Accepted Answer

A)  operating capabilities. 
B)  employee turnover rates. 
C)  defect rates. 
D)  production cycle time. 
A)  operating capabilities. 
B)  employee turnover rates. 
C)  defect rates. 
D)  production cycle time.

Question 11

Financial measures are lead indicators for companies.

Accepted Answer

A) True 
 B)False

Question 12

A company's flexible budget for 93,000 units of production showed sales of $300,000; variable costs of $150,000; and fixed costs of $90,000. What net operating income would you expect the company to earn if it produces and sells 98,000 units? (Assume 98,000 units is in the relevant range.)

Accepted Answer

The answer of A company's flexible budget for 93,000 units...

Question 13

Use the information below to answer the following question(s):
Assume the Cell Phone Division of the First Electronics Corporation had the following results last year (in thousands). Management's target rate of return is 10% and the weighted average cost of capital is 7%. Its effective tax rate is 30%.
  
-What is the First Electronics Corporation cell phone division's Return on Investment (ROI)?

Accepted Answer

A)  15.00% 
B)  25.00% 
C)  30.00% 
D)  200.00% 
A)  15.00% 
B)  25.00% 
C)  30.00% 
D)  200.00%

Question 14

Including nonproductive assets in the ROI calculation unfairly increases the reported rate of return.

Accepted Answer

A) True 
 B)False

Question 15

Decentralization allows top management to hire workers with expert knowledge for each business unit.

Accepted Answer

A) True 
 B)False

Question 16

Companies evaluate investment centres the way they evaluate profit centres.

Accepted Answer

A) True 
 B)False

Question 17

Economic Value Added (EVA) is a special type of Return on Investment (ROI) calculation.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following aspects of a performance evaluation system best describes when a company's actual results are compared to the results of competitors?

Accepted Answer

A)  Motivating unit managers 
B)  Promoting goal congruence 
C)  Benchmarking 
D)  Communicating expectations 
A)  Motivating unit managers 
B)  Promoting goal congruence 
C)  Benchmarking 
D)  Communicating expectations

Question 19

Which of the following aspects of a performance evaluation system best describes when the company's actual results are compared to industry standards?

Accepted Answer

A)  Benchmarking 
B)  Motivating unit managers 
C)  Promoting goal congruence 
D)  Providing feedback 
A)  Benchmarking 
B)  Motivating unit managers 
C)  Promoting goal congruence 
D)  Providing feedback

Question 20

Which of the following aspects of a performance evaluation system best describes when targets are compared to actual results?

Accepted Answer

A)  Communicating company's expectations 
B)  Motivating managers 
C)  Promoting goal congruence 
D)  Providing feedback 
A)  Communicating company's expectations 
B)  Motivating managers 
C)  Promoting goal congruence 
D)  Providing feedback

The manager of the Midwest sales region at Pace Food would be in charge of a(n)

Cash flows from operations and gross margin growth would be examples of the

Rickett Company has operating income of $180,000. Its return on investment (ROI) is 30%, while its target rate of return is 12%. The total assets of Rickett Company would be closest to

Data on three unrelated companies are given in the following table. Fill in the missing information.

The local McDonald's restaurant is likely to be considered to be an investment centre.

Revenue centre performance reports often highlight both the flexible budget variance and the sales volume variance.

Measures of the balanced scorecard's internal business process perspective include all of the following EXCEPT

Financial measures are lead indicators for companies.

A company's flexible budget for 93,000 units of production showed sales of $300,000; variable costs of $150,000; and fixed costs of $90,000. What net operating income would you expect the company to earn if it produces and sells 98,000 units? (Assume 98,000 units is in the relevant range.)

Including nonproductive assets in the ROI calculation unfairly increases the reported rate of return.

Decentralization allows top management to hire workers with expert knowledge for each business unit.

Companies evaluate investment centres the way they evaluate profit centres.

Economic Value Added (EVA) is a special type of Return on Investment (ROI) calculation.

Which of the following aspects of a performance evaluation system best describes when a company's actual results are compared to the results of competitors?

Which of the following aspects of a performance evaluation system best describes when the company's actual results are compared to industry standards?

Which of the following aspects of a performance evaluation system best describes when targets are compared to actual results?

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Cost Behaviour

Cost-Volume-Profit Analysis

Job Costing

Process Costing

Activity Based Costing

Short-Term Business Decisions

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

Capital Investment Decisions and the Time Value of Money

Filters

Exam 11: Performance Evaluation and the Balanced Scorecard

The manager of the Midwest sales region at Pace Food would be in charge of a(n)

Cash flows from operations and gross margin growth would be examples of the

Rickett Company has operating income of $180,000. Its return on investment (ROI) is 30%, while its target rate of return is 12%. The total assets of Rickett Company would be closest to

Data on three unrelated companies are given in the following table. Fill in the missing information.

The local McDonald's restaurant is likely to be considered to be an investment centre.

Revenue centre performance reports often highlight both the flexible budget variance and the sales volume variance.

Measures of the balanced scorecard's internal business process perspective include all of the following EXCEPT

Financial measures are lead indicators for companies.

A company's flexible budget for 93,000 units of production showed sales of $300,000; variable costs of $150,000; and fixed costs of $90,000. What net operating income would you expect the company to earn if it produces and sells 98,000 units? (Assume 98,000 units is in the relevant range.)

Including nonproductive assets in the ROI calculation unfairly increases the reported rate of return.

Decentralization allows top management to hire workers with expert knowledge for each business unit.

Companies evaluate investment centres the way they evaluate profit centres.

Economic Value Added (EVA) is a special type of Return on Investment (ROI) calculation.

Which of the following aspects of a performance evaluation system best describes when a company's actual results are compared to the results of competitors?

Which of the following aspects of a performance evaluation system best describes when the company's actual results are compared to industry standards?

Which of the following aspects of a performance evaluation system best describes when targets are compared to actual results?

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Cost Behaviour

Cost-Volume-Profit Analysis

Job Costing

Process Costing

Activity Based Costing

Short-Term Business Decisions

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

Capital Investment Decisions and the Time Value of Money

Filters