Exam 24: Cost Allocation and Responsibility Accounting

If upper management uses a short time frame to calculate ROI and RI,division managers have an incentive to take actions that will lead to an immediate increase in these measures.

Communicating top management's expectations to segment managers improves goal congruence.

Managerial accountants can design performance evaluation systems that encourage goal congruence.

Which of the following four perspectives of the balanced scorecard enables management to answer the question,"How can we continue to improve and create value?"

Why is using multiple predetermined overhead allocation rates more accurate than using a single plantwide allocation rate?

Which of the following is not an advantage of decentralization?

Mathews Construction Materials Company has a sales office that sells concrete culvert pipes to property developers.The sales office is a revenue center and prepares a monthly responsibility report.The following information is provided.Complete the responsibility report. Mathews Construction Materials Company Revenue Center Responsibility Report

List the two factors that the financial evaluation of investment centers must measure.

In a decentralized company,segment managers may not fully understand the big picture when making decisions.

List and briefly discuss the two limitations of financial performance measures.

Roberts Logistics provides the following information: What is the company's asset turnover ratio? (Round your answer to two decimal places. )

Brisbane,Inc. ,a leading manufacturer of car spare parts,divided its manufacturing process into two Departments - Production and Packing.The estimated overhead costs for the Production and Packing departments amounted to $14,000,000 and $20,000,000,respectively.The company produces two types of parts - Part 1 and Part 2.The total estimated labor hours for the year were 40,000,and estimated machine hours were 35,000.The Production department is mechanized,whereas the Packing department is labor oriented.Calculate the amount of manufacturing overhead costs allocated to Part 1.

Companies evaluate investment centers using the same measures as the profit centers.

Raphael,Inc.has a division that manufactures a component that sells for $170 and has a variable cost of $50.Another division of the company wants to purchase the component.Fixed cost per unit of the component is $24.What is the minimum transfer price if the division is operating below its capacity?

Regardless of the type of responsibility center,responsibility reports should focus on information,not blame.

Which of the following can increase a company's return on investment?

Dellarte Corporation has two major divisions-Agricultural Products and Industrial Products.It provides the following information for the year. Calculate the residual income for the Agriculture Division.

Sales revenue growth,gross margin growth,and return on investment are the key performance indicators for the ________.

Cardoza Construction Materials Company has a sales office that sells concrete culvert pipes to property developers.The sales office is a revenue center and prepares a monthly responsibility report.The following information is provided. What is the sales volume variance for the 36-inch long pipe?

Parkinson Ladders Company provides the following financial information: Calculate return on investment based on the information given above.(Round your answer to two decimal places. )