Question 1

The balanced scorecard measures

Accepted Answer

A)  only financial information 
B)  only nonfinancial information 
C)  both financial and nonfinancial information 
D)  external and internal information 
A)  only financial information 
B)  only nonfinancial information 
C)  both financial and nonfinancial information 
D)  external and internal information

Question 2

The Everest Company has income from operations of $80,000, invested assets of $500,000, and sales of $1,050,000. What is the profit margin?

Accepted Answer

A)  47.6% 
B)  7.6% 
C)  55.2% 
D)  4.8% 
A)  47.6% 
B)  7.6% 
C)  55.2% 
D)  4.8%

Question 3

Materials used by Square Yard Products Inc. in producing Division 3's product are currently purchased from outside suppliers at a cost of $5 per unit. However, the same materials are available from Division 6. Division 6 has unused capacity and can produce the materials needed by Division 3 at a variable cost of $3 per unit. A transfer price of $3.20 per unit is established, and 40,000 units of material are transferred, with no reduction in Division 6's current sales. How much would Division 3's income from operations increase?

Accepted Answer

A)  $150,000 
B)  $50,000 
C)  $32,000 
D)  $72,000 
A)  $150,000 
B)  $50,000 
C)  $32,000 
D)  $72,000

Question 4

If the profit margin for a division is 11% and the investment turnover is 1.5, the rate of return on investment is 7.3%.

Accepted Answer

A) True 
 B)False

Question 5

Pacific Division for Bean Company has a rate of return on investment of 28% and an investment turnover of 1.4. What is the profit margin?

Accepted Answer

A)  28% 
B)  20% 
C)  14% 
D)  39.2% 
A)  28% 
B)  20% 
C)  14% 
D)  39.2%

Question 6

The Ukulele Company's radio division currently is purchasing transistors from the Xiang Co. for $3.50 each. The total number of transistors needed is 8,000 per month. Ukulele Company's electronics division can produce the transistors for a cost of $4.00 each and they have plenty of capacity to manufacture the units. The $4 is made up of $3.25 in variable costs, and $0.75 in allocated fixed costs. What should be the range of a possible transfer price?

Accepted Answer

A)  No transfer should take place. 
B)  $3.51 to $3.99 
C)  $3.26 to $3.99 
D)  $3.26 to $3.49 
A)  No transfer should take place. 
B)  $3.51 to $3.99 
C)  $3.26 to $3.99 
D)  $3.26 to $3.49

Question 7

The following financial information was summarized from the accounting records of Train Corporation for the current year ended December 31:   The gross profit for the Rails Division is:

Accepted Answer

A)  $60,800 
B)  $33,600 
C)  $8,700 
D)  $21,150 
A)  $60,800 
B)  $33,600 
C)  $8,700 
D)  $21,150

Question 8

One of the advantages of decentralization is that delegating authority to managers closest to the operation always results in better decisions.

Accepted Answer

A) True 
 B)False

Question 9

Match between columns
                        Premises: Purchasing
Human Resources
Marketing
Maintenance
President’s office
Payroll Accounting
Information Systems
Transportation

Accepted Answer

The Answer of Number of payroll checks and Number of is...

Question 10

Assume that divisional income from operations amounts to $192,000 and top management has established 15% as the minimum rate of return on divisional assets totaling $1,000,000. The residual income for the division is:

Accepted Answer

A)  $42,000 
B)  $28,800 
C)  $92,000 
D)  $0 
A)  $42,000 
B)  $28,800 
C)  $92,000 
D)  $0

Question 11

ABC Corporation has three service departments with the following costs and activity base:   ABC has three operating divisions, Micro, Macro and Super. Their revenue, cost and activity information are as follows:
  What is the service department charge rate for the Personnel Department?

Accepted Answer

A)  $2,758 
B)  $3,200 
C)  $3,077 
D)  $1,000 
A)  $2,758 
B)  $3,200 
C)  $3,077 
D)  $1,000

Question 12

The rate of return on investment may be computed by multiplying investment turnover by the profit margin.

Accepted Answer

A) True 
 B)False

Question 13

If income from operations for a division is $5,000, invested assets are $25,000, and sales are $30,000, the profit margin is 20%.

Accepted Answer

A) True 
 B)False

Question 14

The following data are taken from the management accounting reports of Dulcimer 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

Question 15

The profit center income statement should include only controllable revenues and expenses.

Accepted Answer

A) True 
 B)False

Question 16

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 17

Using the data from the Coffee & Cocoa Company,

Accepted Answer

@#IMG-DLM& (a)
 @#IMG-DLM& (b)

Question 18

In an investment center, the manager has the responsibility for and the authority to make decisions that affect:

Accepted Answer

A)  the assets invested in the center, but not costs and revenues 
B)  costs and assets invested in the center, but not revenues 
C)  both costs and revenues for the department or division 
D)  not only costs and revenues, but also assets invested in the center 
A)  the assets invested in the center, but not costs and revenues 
B)  costs and assets invested in the center, but not revenues 
C)  both costs and revenues for the department or division 
D)  not only costs and revenues, but also assets invested in the center

Question 19

ABC Corporation has three service departments with the following costs and activity base:   ABC has three operating divisions, Micro, Macro and Super. Their revenue, cost and activity information are as follows:
  How much service department cost would be allocated to the Macro Division?

Accepted Answer

A)  $405,000 
B)  $175,000 
C)  $130,000 
D)  $305,000 
A)  $405,000 
B)  $175,000 
C)  $130,000 
D)  $305,000

Question 20

The Eastern Division of Kentucky Company has a rate of return on investment of 28% and a profit margin of 20%. What is the investment turnover?

Accepted Answer

A)  3.6 
B)  1.4 
C)  5.0 
D)  .7 
A)  3.6 
B)  1.4 
C)  5.0 
D)  .7

The balanced scorecard measures

The Everest Company has income from operations of $80,000, invested assets of $500,000, and sales of $1,050,000. What is the profit margin?

If the profit margin for a division is 11% and the investment turnover is 1.5, the rate of return on investment is 7.3%.

Pacific Division for Bean Company has a rate of return on investment of 28% and an investment turnover of 1.4. What is the profit margin?

The following financial information was summarized from the accounting records of Train Corporation for the current year ended December 31: The gross profit for the Rails Division is:

One of the advantages of decentralization is that delegating authority to managers closest to the operation always results in better decisions.

Assume that divisional income from operations amounts to $192,000 and top management has established 15% as the minimum rate of return on divisional assets totaling $1,000,000. The residual income for the division is:

ABC Corporation has three service departments with the following costs and activity base: ABC has three operating divisions, Micro, Macro and Super. Their revenue, cost and activity information are as follows: What is the service department charge rate for the Personnel Department?

The rate of return on investment may be computed by multiplying investment turnover by the profit margin.

If income from operations for a division is $5,000, invested assets are $25,000, and sales are $30,000, the profit margin is 20%.

The following data are taken from the management accounting reports of Dulcimer 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 profit center income statement should include only controllable revenues and expenses.

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

Using the data from the Coffee & Cocoa Company,

In an investment center, the manager has the responsibility for and the authority to make decisions that affect:

ABC Corporation has three service departments with the following costs and activity base: ABC has three operating divisions, Micro, Macro and Super. Their revenue, cost and activity information are as follows: How much service department cost would be allocated to the Macro Division?

The Eastern Division of Kentucky Company has a rate of return on investment of 28% and a profit margin of 20%. What is the investment turnover?

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Differential Analysis and Product Pricing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Cost Management for Just-In-Time Environments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Filters

Exam 8: Performance Evaluation for Decentralized Operations

The balanced scorecard measures

The Everest Company has income from operations of $80,000, invested assets of $500,000, and sales of $1,050,000. What is the profit margin?

If the profit margin for a division is 11% and the investment turnover is 1.5, the rate of return on investment is 7.3%.

Pacific Division for Bean Company has a rate of return on investment of 28% and an investment turnover of 1.4. What is the profit margin?

The following financial information was summarized from the accounting records of Train Corporation for the current year ended December 31: The gross profit for the Rails Division is:

One of the advantages of decentralization is that delegating authority to managers closest to the operation always results in better decisions.

Assume that divisional income from operations amounts to $192,000 and top management has established 15% as the minimum rate of return on divisional assets totaling $1,000,000. The residual income for the division is:

ABC Corporation has three service departments with the following costs and activity base: ABC has three operating divisions, Micro, Macro and Super. Their revenue, cost and activity information are as follows: What is the service department charge rate for the Personnel Department?

The rate of return on investment may be computed by multiplying investment turnover by the profit margin.

If income from operations for a division is $5,000, invested assets are $25,000, and sales are $30,000, the profit margin is 20%.

The following data are taken from the management accounting reports of Dulcimer 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 profit center income statement should include only controllable revenues and expenses.

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

Using the data from the Coffee & Cocoa Company,

In an investment center, the manager has the responsibility for and the authority to make decisions that affect:

ABC Corporation has three service departments with the following costs and activity base: ABC has three operating divisions, Micro, Macro and Super. Their revenue, cost and activity information are as follows: How much service department cost would be allocated to the Macro Division?

The Eastern Division of Kentucky Company has a rate of return on investment of 28% and a profit margin of 20%. What is the investment turnover?

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Differential Analysis and Product Pricing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Cost Management for Just-In-Time Environments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Filters