Question 1

How much would Division 6's income from operations increase?

Accepted Answer

A) $75,000 
B) $150,000 
C) $100,000 
D) $50,000 
A) $75,000 
B) $150,000 
C) $100,000 
D) $50,000

Question 2

If the profit margin for a division is 11% and the investment turnover is 1.5,the rate of return on investment is 16.5%.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following expenses incurred by a department store is an indirect expense?

Accepted Answer

A) Insurance on merchandise inventory 
B) Sales salaries 
C) Depreciation on store equipment 
D) Salary of vice-president of finance 
A) Insurance on merchandise inventory 
B) Sales salaries 
C) Depreciation on store equipment 
D) Salary of vice-president of finance

Question 4

Which of the following is NOT a commonly used approach to setting transfer prices?

Accepted Answer

A) Market price approach 
B) Revenue price approach 
C) Negotiated price approach 
D) Cost price approach 
A) Market price approach 
B) Revenue price approach 
C) Negotiated price approach 
D) Cost price approach

Question 5

Operating expenses directly traceable to or incurred for the sole benefit of a specific department and usually subject to the control of the department manager are termed

Accepted Answer

A) miscellaneous administrative expenses. 
B) indirect expenses. 
C) direct expenses. 
D) operating expenses. 
A) miscellaneous administrative expenses. 
B) indirect expenses. 
C) direct expenses. 
D) operating expenses.

Question 6

The manager of the furniture department of a leading retailer does NOT control the salaries of departmental personnel.

Accepted Answer

A) True 
 B)False

Question 7

A common balanced scorecard measures performance in all of the following areas EXCEPT

Accepted Answer

A) education. 
B) internal process. 
C) financial. 
D) innovation and learning. 
A) education. 
B) internal process. 
C) financial. 
D) innovation and learning.

Question 8

The sales,income from operations,and invested assets for each division of Salem Company are as follows:
   
Management has established a minimum rate of return for invested assets of 11%.

Accepted Answer

The answer of The sales,income from operations,and invested assets for...

Question 9

Operating expenses directly traceable to or incurred for the sole benefit of a specific department and usually subject to the control of the department manager are termed indirect expenses.

Accepted Answer

A) True 
 B)False

Question 10

A responsibility center in which the department manager has responsibility for and authority over costs in the department is termed a cost center.

Accepted Answer

A) True 
 B)False

Question 11

Personnel administration expense for a department in a store is an indirect expense.

Accepted Answer

A) True 
 B)False

Question 12

Assume that divisional income from operations amounts to $187,000 and top management has established 12% as the minimum rate of return on divisional assets totaling $1,000,000.The residual income for the division is

Accepted Answer

A) $67,000. 
B) $22,440. 
C) $120,000. 
D) $0. 
A) $67,000. 
B) $22,440. 
C) $120,000. 
D) $0.

Question 13

If income from operations for a division is $30,000,sales are $243,750,and invested assets are $187,500,the investment turnover is 1.3.

Accepted Answer

A) True 
 B)False

Question 14

The ratio of sales to invested assets is termed investment turnover.

Accepted Answer

A) True 
 B)False

Question 15

If income from operations for a division is $6,000,invested assets are $25,000,and sales are $30,000,the profit margin is 20%.

Accepted Answer

A) True 
 B)False

Question 16

For higher levels of management,responsibility accounting reports

Accepted Answer

A) are more detailed than for lower levels of management. 
B) are more summarized than for lower levels of management. 
C) contain about the same level of detail as reports for lower levels of management. 
D) are rarely provided or reviewed. 
A) are more detailed than for lower levels of management. 
B) are more summarized than for lower levels of management. 
C) contain about the same level of detail as reports for lower levels of management. 
D) are rarely provided or reviewed.

Question 17

Which of the following would NOT be considered an internal centralized service department?

Accepted Answer

A) Payroll accounting department 
B) Manufacturing department 
C) Information systems department 
D) Purchasing department 
A) Payroll accounting department 
B) Manufacturing department 
C) Information systems department 
D) Purchasing department

Question 18

Responsibility accounting reports for profit centers will include

Accepted Answer

A) costs. 
B) revenues. 
C) expenses and fixed assets. 
D) revenues,expenses,and net income or loss from operations. 
A) costs. 
B) revenues. 
C) expenses and fixed assets. 
D) revenues,expenses,and net income or loss from operations.

Question 19

Which of the following expressions is termed the investment turnover factor as used in determining the rate of return on investment?

Accepted Answer

A) Invested Assets/Sales 
B) Income From Operations/Invested Assets 
C) Income From Operations/Sales 
D) Sales/Invested Assets 
A) Invested Assets/Sales 
B) Income From Operations/Invested Assets 
C) Income From Operations/Sales 
D) Sales/Invested Assets

Question 20

The following data are taken from the management accounting reports of Dancer 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) the managers of Divisions B and C 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) the managers of Divisions B and C divide the bonus.

How much would Division 6's income from operations increase?

If the profit margin for a division is 11% and the investment turnover is 1.5,the rate of return on investment is 16.5%.

Which of the following expenses incurred by a department store is an indirect expense?

Which of the following is NOT a commonly used approach to setting transfer prices?

Operating expenses directly traceable to or incurred for the sole benefit of a specific department and usually subject to the control of the department manager are termed

The manager of the furniture department of a leading retailer does NOT control the salaries of departmental personnel.

A common balanced scorecard measures performance in all of the following areas EXCEPT

The sales,income from operations,and invested assets for each division of Salem Company are as follows: Management has established a minimum rate of return for invested assets of 11%.

Operating expenses directly traceable to or incurred for the sole benefit of a specific department and usually subject to the control of the department manager are termed indirect expenses.

A responsibility center in which the department manager has responsibility for and authority over costs in the department is termed a cost center.

Personnel administration expense for a department in a store is an indirect expense.

Assume that divisional income from operations amounts to $187,000 and top management has established 12% as the minimum rate of return on divisional assets totaling $1,000,000.The residual income for the division is

If income from operations for a division is $30,000,sales are $243,750,and invested assets are $187,500,the investment turnover is 1.3.

The ratio of sales to invested assets is termed investment turnover.

If income from operations for a division is $6,000,invested assets are $25,000,and sales are $30,000,the profit margin is 20%.

For higher levels of management,responsibility accounting reports

Which of the following would NOT be considered an internal centralized service department?

Responsibility accounting reports for profit centers will include

Which of the following expressions is termed the investment turnover factor as used in determining the rate of return on investment?

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

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley,internal Control,and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Capital Investment Analysis

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Exam 14: Performance Evaluation for Decentralized Operations

How much would Division 6's income from operations increase?

If the profit margin for a division is 11% and the investment turnover is 1.5,the rate of return on investment is 16.5%.

Which of the following expenses incurred by a department store is an indirect expense?

Which of the following is NOT a commonly used approach to setting transfer prices?

Operating expenses directly traceable to or incurred for the sole benefit of a specific department and usually subject to the control of the department manager are termed

The manager of the furniture department of a leading retailer does NOT control the salaries of departmental personnel.

A common balanced scorecard measures performance in all of the following areas EXCEPT

The sales,income from operations,and invested assets for each division of Salem Company are as follows: Management has established a minimum rate of return for invested assets of 11%.

Operating expenses directly traceable to or incurred for the sole benefit of a specific department and usually subject to the control of the department manager are termed indirect expenses.

A responsibility center in which the department manager has responsibility for and authority over costs in the department is termed a cost center.

Personnel administration expense for a department in a store is an indirect expense.

Assume that divisional income from operations amounts to $187,000 and top management has established 12% as the minimum rate of return on divisional assets totaling $1,000,000.The residual income for the division is

If income from operations for a division is $30,000,sales are $243,750,and invested assets are $187,500,the investment turnover is 1.3.

The ratio of sales to invested assets is termed investment turnover.

If income from operations for a division is $6,000,invested assets are $25,000,and sales are $30,000,the profit margin is 20%.

For higher levels of management,responsibility accounting reports

Which of the following would NOT be considered an internal centralized service department?

Responsibility accounting reports for profit centers will include

Which of the following expressions is termed the investment turnover factor as used in determining the rate of return on investment?

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

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley,internal Control,and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Capital Investment Analysis

Filters