Exam 10: Decentralization: Responsibility Accounting, Performance Evaluation, and Transfer Pricing

___________________ is the delegation of decision-making authority to successively lower management levels in an organization.

One of the reasons for decentralization is more timely response.This means

Which of the following changes would NOT change return on investment (ROI)?

Beta Division had the following information: If the asset base is decreased by $100,000, with no other changes, the return on investment of Beta Division will be

The Kelly Division of Zimmer Company sells all of its output to the Finishing Division of the company.The only product of the Kelly Division is chair legs that are used by the Finishing Division.The retail price of the legs is $20 per leg.Each chair completed by the Finishing Division requires four legs.Production quantity and cost data for 2011 are as follows: Required: Compute the transfer price for a chair leg using:

If the turnover increased by 30 percent and the margin decreased by 30 percent, the ROI would

_______________ is(are) the right to buy a certain number shares of a company's stock at a particular price.

Multiple measures of performance are beneficial if they

Colorado Furniture had the following historical accounting data, per hundred board feet, concerning one of its products: The shelving is normally transferred internally from the Cutting Division to the Finishing Division.It also may be sold externally for $110 per hundred board feet.The minimum profit level accepted by the company is a markup of 20 percent. If the variable manufacturing cost transfer price method is used without a fixed fee, Colorado Furniture's transfer price will be

The Engine Division provides engines for the Tractor Division of a company.The standard unit costs for the Engine Division are as follows: The engine department has excess capacity.What is the best transfer price to avoid transfer price problems?

Which of the following is NOT an advantage of ROI?

Parker Corporation had sales of $250,000, income of $10,000, and an asset base of $100,000.The turnover is

Which of the following managerial rewards is NOT a short-term reward?

When there is an outside market for an intermediate product that is perfectly competitive, the most equitable method of transfer pricing is

The following information pertains to the three divisions of Marlow Company: - What are the average operating assets for Division Y?

_______________ is(are) a type of fringe benefit received over and above salary.

The Framing Division provides frames for the Tractor Division of a company.The standard unit costs for the Framing Division are as follows: What is the transfer price based on full cost plus a markup of 20 percent?

Which of the following responsibility centers would have a manager responsible for revenues, costs, and investments?

EVA encourages the right kind of behavior from divisions because of its emphasis on

Young Company has a tax rate of 40 percent.Information for the company is as follows: - What is the EVA if the before-tax operating income is $1,500,000?