Exam 11: Performance Evaluation and Decentralization

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Alpha Division had the following information: If the asset base is decreased by $120,000, with no other changes, what will Alpha Division's return on investment be? (Note: Round answer to two decimal places.)  Alpha Division had the following information: If the asset base is decreased by $120,000, with no other changes, what will Alpha Division's return on investment be? (Note: Round answer to two decimal places.)

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Atlas Company provided the following information for last year:  Atlas Company provided the following information for last year:   -  Calculate Atlas's margin for last year.(Note: Round answer to two decimal places.) - Calculate Atlas's margin for last year.(Note: Round answer to two decimal places.)

(Multiple Choice)
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The Balanced Scorecard perspective that describes the economic consequences of actions taken in the other three perspectives is the ____ perspective.

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Turnover is the most common measure of performance for an investment center.

(True/False)
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​Which of the following is true of a decentralized company?

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The manager of a division is displeased with the ROI of the division.One step that would increase ROI (holding everything else constant) is

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A segment of Mega Inc., manufactures and sells blankets.The various models of blankets are produced in a single factory using stable technology.They are sold by the sales department, also located in the factory.The segment is most probably accounted for as a(n)

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A responsibility center in which a manager is responsible for both revenues and costs is a(n)

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In a decentralized company, central management is able to focus on strategic planning and decision making.

(True/False)
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________________ decision making allows managers at lower levels to make and implement key decisions pertaining to their areas of responsibility.

(Short Answer)
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In negotiated transfer pricing, the selling division sets the ceiling (maximum possible transfer price) for the bargaining range.

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A production department within the factory, such as assembly, is an example of a profit center.

(True/False)
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A testable strategy is defined as a

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An ______________________ is when a manager is responsible for revenues, costs and investments.

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Which of the following is true of decentralization?

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___________________ is after-tax operating income minus the dollar cost of capital employed.

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The following information pertains to the three divisions of Yang Company: The following information pertains to the three divisions of Yang Company:   -  What are the average operating assets for Division C? - What are the average operating assets for Division C?

(Multiple Choice)
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If the operating asset turnover ratio increased by 30% and the margin increased by 20%, the divisional ROI

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Which of the following is not an advantage of ROI?

(Multiple Choice)
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Residual income is the difference between operating income and the product of the hurdle rate and the company's average operating assets.

(True/False)
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