Question 1

A flexible budget is derived by dividing actual unit costs by the standard unit costs.

Accepted Answer

A) True 
 B)False

Question 2

Compute the May 2014 EVA for an investment center with the following information:

Accepted Answer

A) $12,292,405 
B) $12,710,500 
C) $11,931,500 
D) $12,235,500 
A) $12,292,405 
B) $12,710,500 
C) $11,931,500 
D) $12,235,500

Question 3

Use the following performance report for a cost center of the Dry Cat Food Division for the month ended December 31 to answer the questions below.   
-Using the information provided for Portia Corporation,what were the actual sales?

Accepted Answer

A) $185 
B) $35 
C) $190 
D) $40 
A) $185 
B) $35 
C) $190 
D) $40

Question 4

Compute the July 2014 cost of capital (rounded to nearest percent)for an investment center with the following information:

Accepted Answer

A) 5 percent 
B) 53 percent 
C) 10 percent 
D) 61 percent 
A) 5 percent 
B) 53 percent 
C) 10 percent 
D) 61 percent

Question 5

The learning and growth perspective of Sweetcake Restaurant shows increasing customer satisfaction as an objective.Which of the following will be an appropriate performance measure of this objective?

Accepted Answer

A) Number of new chefs trained in each department 
B) Order delivery time 
C) Percentage growth in sales 
D) Percentage growth in profit 
A) Number of new chefs trained in each department 
B) Order delivery time 
C) Percentage growth in sales 
D) Percentage growth in profit

Question 6

Use the following performance report for a cost center of the Dry Cat Food Division for the month ended December 31 to answer the questions below.   
-Using the information provided for Dry Cat Food division,what is the direct materials variance between the actual results and the flexible budget?

Accepted Answer

A) $14 (U) 
B) $14 (F) 
C) $30 (U) 
D) $30 (F) 
A) $14 (U) 
B) $14 (F) 
C) $30 (U) 
D) $30 (F)

Question 7

As the staff accountant for Investment Center 916,calculate the October 2014 ROI,using the following information:
   
Round your answers to two decimal places.

Accepted Answer

Assets Invested = ($1,850,000

Question 8

In general,there are ________ types of responsibility centers.

Accepted Answer

A) two 
B) five 
C) ten 
D) three 
A) two 
B) five 
C) ten 
D) three

Question 9

Which of the following statements is true of performance measurement?

Accepted Answer

A) It measures only qualitative information. 
B) It uses both qualitative and quantitative tools to measure the performance. 
C) It helps in understanding a company's performance related to a specific goal. 
D) It cannot be used by service companies. 
A) It measures only qualitative information. 
B) It uses both qualitative and quantitative tools to measure the performance. 
C) It helps in understanding a company's performance related to a specific goal. 
D) It cannot be used by service companies.

Question 10

Compute the average assets invested for the Omega International's investment center as shown below.

Accepted Answer

A) $14,350 
B) $14,400 
C) $14,300 
D) $14,250 
A) $14,350 
B) $14,400 
C) $14,300 
D) $14,250

Question 11

Calculate ROI,residual income,and EVA for each of the investment centers listed.(Round to two decimal places. )

Accepted Answer

The answer of Calculate ROI,residual income,and EVA for each of...

Question 12

When compared with which of the following,the EVA of an investment center will be more meaningful?

Accepted Answer

A) Target EVAs 
B) EVAs from other investment centers 
C) EVAs from previous periods 
D) All of these choices 
A) Target EVAs 
B) EVAs from other investment centers 
C) EVAs from previous periods 
D) All of these choices

Question 13

The manager of Center E provides administrative activities for the other centers in the company.What type of responsibility center is Center E?

Accepted Answer

A) Cost center 
B) Discretionary cost center 
C) Revenue center 
D) Investment center 
A) Cost center 
B) Discretionary cost center 
C) Revenue center 
D) Investment center

Question 14

A good example of a profit center would be

Accepted Answer

A) a car manufacturer's assembly line. 
B) a local Home Depot store. 
C) Avis Car Rental's national reservation center. 
D) a manufacturer's human resources department. 
A) a car manufacturer's assembly line. 
B) a local Home Depot store. 
C) Avis Car Rental's national reservation center. 
D) a manufacturer's human resources department.

Question 15

The format of a variable costing income statement is similar to a(n)

Accepted Answer

A) contribution margin income statement. 
B) traditional income statement. 
C) audited income statement. 
D) single-step income statement. 
A) contribution margin income statement. 
B) traditional income statement. 
C) audited income statement. 
D) single-step income statement.

Question 16

The linking of employee compensation to the achievement of measurable business targets is called

Accepted Answer

A) compensation goal. 
B) performance-based compensation. 
C) performance target. 
D) performance linkage. 
A) compensation goal. 
B) performance-based compensation. 
C) performance target. 
D) performance linkage.

Question 17

One of the major goals of the Sweetcake Restaurant is customer satisfaction.In the light of this goal,match the internal business processes perspective with the appropriate target.

Accepted Answer

A) Increase the continuous training to chefs 
B) Serve the food within 10 minutes of placing an order 
C) Make sure the customer appreciation program is successful 
D) Increase the profits of the restaurant 
A) Increase the continuous training to chefs 
B) Serve the food within 10 minutes of placing an order 
C) Make sure the customer appreciation program is successful 
D) Increase the profits of the restaurant

Question 18

A variable costing income statement is also called a traditional income statement.

Accepted Answer

A) True 
 B)False

Question 19

What is the business purpose of the balanced scorecard,and how does it benefit an organization?

Accepted Answer

The purpose of the balanced scorecard is

Question 20

Standard costing would most often require which type of performance evaluation?

Accepted Answer

A) Flexible budgeting 
B) Static budgeting 
C) Variable costing 
D) None of these choices 
A) Flexible budgeting 
B) Static budgeting 
C) Variable costing 
D) None of these choices

Exam 23: Flexible Budgets and Performance Analysis

A flexible budget is derived by dividing actual unit costs by the standard unit costs.

Compute the May 2014 EVA for an investment center with the following information:

Use the following performance report for a cost center of the Dry Cat Food Division for the month ended December 31 to answer the questions below. -Using the information provided for Portia Corporation,what were the actual sales?

Compute the July 2014 cost of capital (rounded to nearest percent)for an investment center with the following information:

The learning and growth perspective of Sweetcake Restaurant shows increasing customer satisfaction as an objective.Which of the following will be an appropriate performance measure of this objective?

Use the following performance report for a cost center of the Dry Cat Food Division for the month ended December 31 to answer the questions below. -Using the information provided for Dry Cat Food division,what is the direct materials variance between the actual results and the flexible budget?

As the staff accountant for Investment Center 916,calculate the October 2014 ROI,using the following information: Round your answers to two decimal places.

In general,there are ________ types of responsibility centers.

Which of the following statements is true of performance measurement?

Compute the average assets invested for the Omega International's investment center as shown below.

Calculate ROI,residual income,and EVA for each of the investment centers listed.(Round to two decimal places. )

When compared with which of the following,the EVA of an investment center will be more meaningful?

The manager of Center E provides administrative activities for the other centers in the company.What type of responsibility center is Center E?

A good example of a profit center would be

The format of a variable costing income statement is similar to a(n)

The linking of employee compensation to the achievement of measurable business targets is called

One of the major goals of the Sweetcake Restaurant is customer satisfaction.In the light of this goal,match the internal business processes perspective with the appropriate target.

A variable costing income statement is also called a traditional income statement.

What is the business purpose of the balanced scorecard,and how does it benefit an organization?

Standard costing would most often require which type of performance evaluation?

Accounting Principles and the Financial Statements

Analyzing and Recording Business Transactions

Adjusting the Accounts

Completing the Accounting Cycle

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Long -Term Assets

Current Liabilities and Fair Value Accounting

Accounting for Partnerships

Accounting for Corporations

Long Term Liabilities

The Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting and Cost Concepts

Costing Systems: Job Order Costing

Costing Systems Process Costing

Value-Based Systems: Activity-Based Costing and Lean Accounting

Cost-Volume-Profit Analysis

The Budgeting Process

Standard Costing and Variance Analysis

Short-Run Decision Analysis and Capital Budgeting

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