Question 1

Which of the following is an expanded form of calculating return on investment?

Accepted Answer

A) Profit margin ratio × Asset turnover ratio 
B) Net profit ratio × Inventory turnover ratio 
C) Gross profit ratio × EVA 
D) Asset turnover ratio × Inventory turnover ratio 
A) Profit margin ratio × Asset turnover ratio 
B) Net profit ratio × Inventory turnover ratio 
C) Gross profit ratio × EVA 
D) Asset turnover ratio × Inventory turnover ratio

Question 2

Manufacturing overhead costs,which are also known as indirect costs,cannot be cost-effectively traced to products.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is a key performance indicator of the internal business perspective in a balanced scorecard?

Accepted Answer

A) hours of employee training 
B) number of warranty claims received 
C) percentage of market share 
D) return on investment 
A) hours of employee training 
B) number of warranty claims received 
C) percentage of market share 
D) return on investment

Question 4

Which of the following managers is likely to have the least amount of responsibilities?

Accepted Answer

A) the manager of a cost center 
B) the manager of a profit center 
C) the manager of an investment center 
D) the manager of a transfer pricing center 
A) the manager of a cost center 
B) the manager of a profit center 
C) the manager of an investment center 
D) the manager of a transfer pricing center

Question 5

The balanced scorecard is a performance evaluation system that requires management to consider financial measures of performance,but not nonfinancial measures.

Accepted Answer

A) True 
 B)False

Question 6

A furniture corporation manufactures two models of furniture-Standard and Deluxe.The total estimated manufacturing overhead costs are $64,350.The following estimates are available:
 
The company uses direct labor costs as the base to allocate manufacturing overhead.Calculate the predetermined overhead rate.(Round your answer to two decimal places. )

Accepted Answer

A) 31.76% 
B) 33.94% 
C) 191.52% 
D) 65.13% 
A) 31.76% 
B) 33.94% 
C) 191.52% 
D) 65.13%

Question 7

Trainor Logistics provides the following information:
 
What is the company's return on investment? (Round your answer to two decimal places. )

Accepted Answer

A) 11.85% 
B) 14.81% 
C) 80.00% 
D) 30.00% 
A) 11.85% 
B) 14.81% 
C) 80.00% 
D) 30.00%

Question 8

Revenue center responsibility reports show all costs incurred by the department and are useful when management needs to know the full cost of operating the department.

Accepted Answer

A) True 
 B)False

Question 9

A profit center responsibility report ________.

Accepted Answer

A) should not include costs for which the profit center manager is not accountable 
B) does not include revenues since that information only appears on the revenue center responsibility report 
C) includes traceable fixed expenses 
D) is the same as a performance report 
A) should not include costs for which the profit center manager is not accountable 
B) does not include revenues since that information only appears on the revenue center responsibility report 
C) includes traceable fixed expenses 
D) is the same as a performance report

Question 10

Bernaise,Inc.sells cosmetic products in the United States.Which one of the following is most likely to be a revenue center for Bernaise?

Accepted Answer

A) a Bernaise retail store in Dallas 
B) the Bernaise human resource department 
C) a Bernaise kiosk at a mall for selling its products 
D) the Bernaise product lines 
A) a Bernaise retail store in Dallas 
B) the Bernaise human resource department 
C) a Bernaise kiosk at a mall for selling its products 
D) the Bernaise product lines

Question 11

Kurtz Logistics provides the following information:
 
What is the company's profit margin ratio?

Accepted Answer

A) 13.0% 
B) 10.3% 
C) 79.5% 
D) 27.9% 
A) 13.0% 
B) 10.3% 
C) 79.5% 
D) 27.9%

Question 12

Which of the following affects the company's ability to make on-time deliveries?

Accepted Answer

A) return on investment 
B) product's price 
C) warranty claims 
D) production cycle time 
A) return on investment 
B) product's price 
C) warranty claims 
D) production cycle time

Question 13

Which of the following internal business perspective key performance indicators (KPIs)is commonly used to assess the innovation process?

Accepted Answer

A) number of new products developed 
B) number of warranty claims 
C) employee turnover rate 
D) rate of on-time deliveries 
A) number of new products developed 
B) number of warranty claims 
C) employee turnover rate 
D) rate of on-time deliveries

Question 14

Which of the following is a key performance indicator of the customer perspective in a balanced scorecard?

Accepted Answer

A) defect rate 
B) employee satisfaction 
C) gross margin growth 
D) number of repeat customers 
A) defect rate 
B) employee satisfaction 
C) gross margin growth 
D) number of repeat customers

Question 15

A unique factor of responsibility accounting performance reports is the focus on responsibility and controllability.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is the correct formula for calculating return on investment?

Accepted Answer

A) Net profit / Sales 
B) Gross profit / Sales 
C) Operating income / Average total assets 
D) Earnings available to stockholders / Number of outstanding shares of stock 
A) Net profit / Sales 
B) Gross profit / Sales 
C) Operating income / Average total assets 
D) Earnings available to stockholders / Number of outstanding shares of stock

Question 17

The practice of comparing a company's achievements against the best practices in the industry is known as goal congruence.

Accepted Answer

A) True 
 B)False

Question 18

To evaluate the financial performance of an investment center,a business needs key performance indicators that measure ________.

Accepted Answer

A) manufacturing efficiency and product defect rate 
B) operating income and the use of the center's assets 
C) customer satisfaction and market share 
D) generation of sales revenues and control of operating expenses 
A) manufacturing efficiency and product defect rate 
B) operating income and the use of the center's assets 
C) customer satisfaction and market share 
D) generation of sales revenues and control of operating expenses

Question 19

A lag indicator is a performance measure that forecasts future performance.

Accepted Answer

A) True 
 B)False

Question 20

In general,calculating ROI based on the gross book value of assets gives managers an incentive to continue using old,outdated equipment.

Accepted Answer

A) True 
 B)False

Exam 24: Cost Allocation and Responsibility Accounting

Which of the following is an expanded form of calculating return on investment?

Manufacturing overhead costs,which are also known as indirect costs,cannot be cost-effectively traced to products.

Which of the following is a key performance indicator of the internal business perspective in a balanced scorecard?

Which of the following managers is likely to have the least amount of responsibilities?

The balanced scorecard is a performance evaluation system that requires management to consider financial measures of performance,but not nonfinancial measures.

Trainor Logistics provides the following information: What is the company's return on investment? (Round your answer to two decimal places. )

Revenue center responsibility reports show all costs incurred by the department and are useful when management needs to know the full cost of operating the department.

A profit center responsibility report ________.

Bernaise,Inc.sells cosmetic products in the United States.Which one of the following is most likely to be a revenue center for Bernaise?

Kurtz Logistics provides the following information: What is the company's profit margin ratio?

Which of the following affects the company's ability to make on-time deliveries?

Which of the following internal business perspective key performance indicators (KPIs)is commonly used to assess the innovation process?

Which of the following is a key performance indicator of the customer perspective in a balanced scorecard?

A unique factor of responsibility accounting performance reports is the focus on responsibility and controllability.

Which of the following is the correct formula for calculating return on investment?

The practice of comparing a company's achievements against the best practices in the industry is known as goal congruence.

To evaluate the financial performance of an investment center,a business needs key performance indicators that measure ________.

A lag indicator is a performance measure that forecasts future performance.

In general,calculating ROI based on the gross book value of assets gives managers an incentive to continue using old,outdated equipment.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Short-Term Business Decisions

Capital Investment Decisions

Filters