Exam 12: Performance Evaluation and Decentralization

Sentenal Company had income of $20,000,average assets of $200,000,and sales of $80,000.What is Sentenal's ROI?

A key feature of economic value added (EVA)is that it emphasizes after-tax operating income and the actual cost of capital.

Which Balanced Scorecard perspective details the internal processes needed to provide value for customers and owners?

Which of the following is NOT a reason for decentralization?

The following information pertains to the three divisions of Borraw Company: Division A Division B Sales ? 1,250,000 Net operating income \ 25,000 \ 75,000 Average operating assets ? ? Return on investment 20\% 15\% Margin 0.05 ? Turnover ? ? Target ROI 12\% 10\% -Refer to the Figure.What is the turnover for Division B?

Which Balanced Scorecard perspective defines the capabilities that an organization needs to create long-term improvement?

Which Balanced Scorecard perspective details the economic consequences of actions taken in the other three perspectives?

In which of the following responsibility centres is a manager responsible for revenues,cost,and investment?

Match each term with the correct statement from below. -A Balanced Scorecard viewpoint that describes the internal processes needed to provide value for customers and owners.

What is Strategy?

Corrugated, Inc. has many divisions that are evaluated on the basis of ROI. One division, the Box Division, makes boxes. The Candy Division makes candy and needs 50,000 boxes per year. The Box Division incurs the following costs for one box: The Box Division has capacity to make 500,000 boxes per year. The Candy Division currently buys its boxes from an outside supplier for $1.40 each (the same price that the Box Division receives). Direct materials \ 0.20 Direct labour 0.70 Variable overhead 0.10 Fixed overhead 0.23 Total \ 1.23 -Refer to the Figure.Assume that Corrugated,Inc.allows division managers to negotiate the transfer price.The Box Division is producing 400,000 boxes.Suppose the Box Division and the Candy Division agree to transfer boxes.What would be the floor of the bargaining range and which division sets it?

The snowboard manufacturing cell has 1,200 hours of time available per quarter.The cell could make 7,200 snowboards but made only 6,000 during that time.Calculate the following: A. Theoretical cycle time in minutes B. Theoretical velocity per hour C. Actual cycle time in minutes D. Actual velocity per hour E. MCE is _____ $\%$ (round your answer two digits).

Which of the following is NOT an advantage of ROI?

Win Company has the following data: Dixie Company has a target ROI of 20%. Required: Calculate the following amounts for each division: Division A Division B Sales \ 400,000 \ 300,000 Contribution margin 160,000 125,000 Operating income 80,000 30,000 Average operating assets 320,000 200,000 Cost of capital 15\% 15\% A. Margin ratio B. Turnover ratio C. ROI D. Residual income E. EVA

The Engine Division provides engines for the Tractor Division of a company.The standard unit costs for Engine Division are as follows: What is the transfer price that is based on full cost plus a markup of 35%? Direct materials \ 700 Direct labour 1,300 Variable overhead 400 Fixed overhead 350 Market price per unit 2,730

Which responsibility centre designation would be used for a production manager?

In a decentralized company,central management is able to focus on the day-to-day operations of the company.

The manager of a division is displeased with the ROI of the division.Which of the following steps would increase ROI (holding everything else constant)?

The company as a whole may be harmed when divisions refuse to transfer goods with a market price transfer policy.

Match each term with the correct statement from below. -The manager of a(n)___________ is evaluated on the basis of income.