Question 1

Several transfer pricing policies are used in practice.Which of the following transfer pricing policies is not used?

Accepted Answer

A) transfer at market price 
B) transfer at negotiated price 
C) transfer at cost 
D) transfer at zero cost 
A) transfer at market price 
B) transfer at negotiated price 
C) transfer at cost 
D) transfer at zero cost

Question 2

A hospital decided to streamline its surgical suite operation.The nurses in charge studied the amount of time patients actually spent in various activities.They found that,on average,a patient scheduled for an operation spent about 2 hours waiting and 2.5 hours moving from the lab to the X-ray to the operating room.The average operation takes 120 minutes.What is the MCE?

Accepted Answer

A) 20.0% 
B) 30.8% 
C) 50.0% 
D) 60.8% 
A) 20.0% 
B) 30.8% 
C) 50.0% 
D) 60.8%

Question 3

Last night,Rebecca worked on her accounting homework for two and a half hours.During that time,she completed eight problems.What is Rebecca's cycle time for one problem?

Accepted Answer

A) 4.50 minutes 
B) 6.25 minutes 
C) 10.25 minutes 
D) 18.75 minutes 
A) 4.50 minutes 
B) 6.25 minutes 
C) 10.25 minutes 
D) 18.75 minutes

Question 4

The manager of Gamma Division projects the following for next year:
The manager can invest in an additional project that would require $30,000 investment in additional assets and would generate $4,200 of additional income. The company's minimum rate of return is 12%.
 $\begin{array}{ll}
\text { Sales } & \$ 100,000 \
\text { Operating income } & \$ 30,000 \
\text { Operating assets } & \$ 200,000
\end{array}$
-Refer to the Figure.What is the residual income for Gamma Division with the additional project?

Accepted Answer

A) $4,200 
B) $6,000 
C) $6,600 
D) $27,600 
A) $4,200 
B) $6,000 
C) $6,600 
D) $27,600

Question 5

Which formula is used to calculate MCE (manufacturing cycle efficiency)?

Accepted Answer

A) processing time/nonprocessing time 
B) nonprocessing time/processing time 
C) total time/processing time 
D) processing time/total time 
A) processing time/nonprocessing time 
B) nonprocessing time/processing time 
C) total time/processing time 
D) processing time/total time

Question 6

Provide the missing data in the following situations:
 $\begin{array}{lrrr}&\text { Northern } & \text { Southern } & \text { Eastern } \
&\text { Division } & \text { Division } & \text { Division }\
\text { Sales } & \$(\mathrm{~A}) & \$ 250,000 & \$(\mathrm{G}) \
\text { Operating assets } & \$(\mathrm{~B}) & \$(\mathrm{D}) & \$ 800,000 \
\text { Net operating income } & \$ 400,000 & \$ 10,000 & \$ 144,000\\text { Margin } & 0.08 & (\mathrm{E}) & 0.12 \
\text { Tumover } & (\mathrm{C}) & (\mathrm{F}) & 1.5 \
\text { Retum on investment } & 16 \% & 10 \% & (\mathrm{H})
\end{array}$

Accepted Answer

The answer of Provide the missing data in the following...

Question 7

The Seasonal Division of The Hudson Bay Department Store had a net income of $660,000,a net asset base of $5,000,000,and a required rate of return of 10%.Sales for the period totalled $4,00,000.What was the residual income for the period?

Accepted Answer

A) $80,000 
B) $160,000 
C) $360,000 
D) $480,000 
A) $80,000 
B) $160,000 
C) $360,000 
D) $480,000

Question 8

The following information pertains to the three divisions of Borraw Company:
 $\begin{array}{lrr} 
& \text { Division A } & \text { Division B } \
\text { Sales } & ? & 1,250,000 \
\text { Net operating income } & \$ 25,000 & \$ 75,000\\text { Average operating assets } & ? & ? \
\text { Return on investment } & 20 \% & 15 \% \
\text { Margin } & 0.05 & ? \
\text { Turnover } & ? & ? \
\text { Target ROI } & 12 \% & 10 \%
\end{array}$
-Refer to the Figure.What are the sales for Division A?

Accepted Answer

A) $25,000 
B) $125,000 
C) $208,333 
D) $500,000 
A) $25,000 
B) $125,000 
C) $208,333 
D) $500,000

Question 9

Select the appropriate definition for each of the items listed below.
-The ratio of sales to average operating assets.

Accepted Answer

A) Turnover 
B) Margin 
C) ROI 
D) Residual income 
A) Turnover 
B) Margin 
C) ROI 
D) Residual income

Question 10

Which of the following is an absolute dollar measure rather than a percentage?

Accepted Answer

A) return on investment 
B) percentage of sales 
C) division return on investment 
D) economic value added (EV
A)  
A) return on investment 
B) percentage of sales 
C) division return on investment 
D) economic value added (EV
A)

Question 11

The net income reduced by the total annual cost of capital is equal to the economic value added.

Accepted Answer

A) True 
 B)False

Question 12

How is turnover calculated?

Accepted Answer

A) operating income/average operating assets 
B) average operating assets/operating income 
C) operating income/sales 
D) sales/average operating assets 
A) operating income/average operating assets 
B) average operating assets/operating income 
C) operating income/sales 
D) sales/average operating assets

Question 13

The following information pertains to the three divisions of Borraw Company:
 $\begin{array}{lrr} 
& \text { Division A } & \text { Division B } \
\text { Sales } & ? & 1,250,000 \
\text { Net operating income } & \$ 25,000 & \$ 75,000\\text { Average operating assets } & ? & ? \
\text { Return on investment } & 20 \% & 15 \% \
\text { Margin } & 0.05 & ? \
\text { Turnover } & ? & ? \
\text { Target ROI } & 12 \% & 10 \%
\end{array}$
-Refer to the Figure.What are the average operating assets for Division B?

Accepted Answer

A) $75,000 
B) $187,500 
C) $500,000 
D) $1,250,000 
A) $75,000 
B) $187,500 
C) $500,000 
D) $1,250,000

Question 14

What is the decision-making approach that allows managers at lower levels to make and implement key decisions pertaining to their areas of responsibility?

Accepted Answer

A) responsibility accounting 
B) controllable accounting 
C) decentralization 
D) optimal strategic accounting 
A) responsibility accounting 
B) controllable accounting 
C) decentralization 
D) optimal strategic accounting

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Select the appropriate definition for each of the items listed below.
-The dollar difference between operating income and minimum required return.

Accepted Answer

A) Turnover 
B) Margin 
C) ROI 
D) Residual income 
A) Turnover 
B) Margin 
C) ROI 
D) Residual income

Question 17

The manager of Gamma Division projects the following for next year:
The manager can invest in an additional project that would require $30,000 investment in additional assets and would generate $4,200 of additional income. The company's minimum rate of return is 12%.
 $\begin{array}{ll}
\text { Sales } & \$ 100,000 \
\text { Operating income } & \$ 30,000 \
\text { Operating assets } & \$ 200,000
\end{array}$
-Refer to the Figure.What is the residual income for Gamma Division without the additional investment?

Accepted Answer

A) $4,200 
B) $6,000 
C) $6,600 
D) $24,000 
A) $4,200 
B) $6,000 
C) $6,600 
D) $24,000

Question 18

Condor Company provided the following information for last year:
 $$\begin{array} { l l } 
\text { Operating income } & \$ 60,000 \
\text { Sales } & \$ 240,000 \
\text { Beginning operating assets } & \$ 440,000 \
\text { Ending operating assets } & \$ 450,000
\end{array}$$
-Refer to the Figure.What was Condor's turnover ratio last year?

Accepted Answer

A) 0.10 
B) 0.16 
C) 0.32 
D) 0.54 
A) 0.10 
B) 0.16 
C) 0.32 
D) 0.54

Question 19

In terms of operating income for the company as a whole,the transfer price set by the buying and selling divisions nets out.

Accepted Answer

A) True 
 B)False

Question 20

What does the difference between realization and sacrifice define?

Accepted Answer

A) target objectives 
B) reliability 
C) single-loop feedback 
D) customer value 
A) target objectives 
B) reliability 
C) single-loop feedback 
D) customer value

Several transfer pricing policies are used in practice.Which of the following transfer pricing policies is not used?

Last night,Rebecca worked on her accounting homework for two and a half hours.During that time,she completed eight problems.What is Rebecca's cycle time for one problem?

Which formula is used to calculate MCE (manufacturing cycle efficiency)?

The Seasonal Division of The Hudson Bay Department Store had a net income of $660,000,a net asset base of $5,000,000,and a required rate of return of 10%.Sales for the period totalled $4,00,000.What was the residual income for the period?

Select the appropriate definition for each of the items listed below. -The ratio of sales to average operating assets.

Which of the following is an absolute dollar measure rather than a percentage?

The net income reduced by the total annual cost of capital is equal to the economic value added.

How is turnover calculated?

What is the decision-making approach that allows managers at lower levels to make and implement key decisions pertaining to their areas of responsibility?

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

Select the appropriate definition for each of the items listed below. -The dollar difference between operating income and minimum required return.

Condor Company provided the following information for last year: Operating income \ 60,000 Sales \ 240,000 Beginning operating assets \ 440,000 Ending operating assets \ 450,000 -Refer to the Figure.What was Condor's turnover ratio last year?

In terms of operating income for the company as a whole,the transfer price set by the buying and selling divisions nets out.

What does the difference between realization and sacrifice define?

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behaviour

Costvolumeprofit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Budgeting, production, cash, and Master Budget

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters

Exam 12: Performance Evaluation and Decentralization

Several transfer pricing policies are used in practice.Which of the following transfer pricing policies is not used?

Last night,Rebecca worked on her accounting homework for two and a half hours.During that time,she completed eight problems.What is Rebecca's cycle time for one problem?

Which formula is used to calculate MCE (manufacturing cycle efficiency)?

The Seasonal Division of The Hudson Bay Department Store had a net income of $660,000,a net asset base of $5,000,000,and a required rate of return of 10%.Sales for the period totalled $4,00,000.What was the residual income for the period?

Select the appropriate definition for each of the items listed below. -The ratio of sales to average operating assets.

Which of the following is an absolute dollar measure rather than a percentage?

The net income reduced by the total annual cost of capital is equal to the economic value added.

How is turnover calculated?

What is the decision-making approach that allows managers at lower levels to make and implement key decisions pertaining to their areas of responsibility?

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

Select the appropriate definition for each of the items listed below. -The dollar difference between operating income and minimum required return.

Condor Company provided the following information for last year: Operating income \ 60,000 Sales \ 240,000 Beginning operating assets \ 440,000 Ending operating assets \ 450,000 -Refer to the Figure.What was Condor's turnover ratio last year?

In terms of operating income for the company as a whole,the transfer price set by the buying and selling divisions nets out.

What does the difference between realization and sacrifice define?

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behaviour

Costvolumeprofit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Budgeting, production, cash, and Master Budget

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters