Question 1

Division A's residual income is:

Accepted Answer

A) $20,000 
B) $30,000 
C) $35,000 
D) $45,000 
A) $20,000 
B) $30,000 
C) $35,000 
D) $45,000

Question 2

The division's return on investment (ROI) is closest to:

Accepted Answer

A) 19.9% 
B) 16.6% 
C) 1.6% 
D) 5.7% 
A) 19.9% 
B) 16.6% 
C) 1.6% 
D) 5.7%

Question 3

The margin in Year 2 was:

Accepted Answer

A) 18.75% 
B) 27.00% 
C) 22.50% 
D) 12.00% 
A) 18.75% 
B) 27.00% 
C) 22.50% 
D) 12.00%

Question 4

Average operating assets are $110,000 and net operating income is $23,100. The company invests $25,000 in new assets for a project that will increase net operating income by $4,750. What is the return on investment (ROI) of the new project?

Accepted Answer

A) 21% 
B) 19% 
C) 18.5% 
D) 20% 
A) 21% 
B) 19% 
C) 18.5% 
D) 20%

Question 5

Residual income is a better measure for performance evaluation of an investment center manager than return on investment because:

Accepted Answer

A) the problems associated with measuring the asset base are eliminated. 
B) desirable investment decisions will not be rejected by divisions that already have a high ROI. 
C) only the gross book value of assets needs to be calculated. 
D) returns do not increase as assets are depreciated. 
A) the problems associated with measuring the asset base are eliminated. 
B) desirable investment decisions will not be rejected by divisions that already have a high ROI. 
C) only the gross book value of assets needs to be calculated. 
D) returns do not increase as assets are depreciated.

Question 6

The throughput time was:

Accepted Answer

A) 9.3 hours 
B) 4.9 hours 
C) 30.9 hours 
D) 26 hours 
A) 9.3 hours 
B) 4.9 hours 
C) 30.9 hours 
D) 26 hours

Question 7

In computing the margin in a ROI analysis, which of the following is used?

Accepted Answer

A) Sales in the denominator 
B) Net operating income in the denominator 
C) Average operating assets in the denominator 
D) Residual income in the denominator 
A) Sales in the denominator 
B) Net operating income in the denominator 
C) Average operating assets in the denominator 
D) Residual income in the denominator

Question 8

The division's turnover is closest to:

Accepted Answer

A) 3.78 
B) 41.67 
C) 4.16 
D) 0.10 
A) 3.78 
B) 41.67 
C) 4.16 
D) 0.10

Question 9

The division's margin is closest to:

Accepted Answer

A) 26.2% 
B) 23.5% 
C) 2.7% 
D) 11.5% 
A) 26.2% 
B) 23.5% 
C) 2.7% 
D) 11.5%

Question 10

Garnick Corporation keeps careful track of the time required to fill orders. The times recorded for a particular order appear below:   The delivery cycle time was:

Accepted Answer

A) 3.5 hours 
B) 8.7 hours 
C) 34.9 hours 
D) 36.1 hours 
A) 3.5 hours 
B) 8.7 hours 
C) 34.9 hours 
D) 36.1 hours

Question 11

What is the move time recorded for the operation?

Accepted Answer

A) 1.5 hours 
B) 6.5 hours 
C) 5.8 hours 
D) 0.85 hours 
A) 1.5 hours 
B) 6.5 hours 
C) 5.8 hours 
D) 0.85 hours

Question 12

The division's return on investment (ROI) is closest to:

Accepted Answer

A) 49.0% 
B) 11.5% 
C) 0.3% 
D) 2.2% 
A) 49.0% 
B) 11.5% 
C) 0.3% 
D) 2.2%

Question 13

The division's turnover is closest to:

Accepted Answer

A) 3.82 
B) 4.26 
C) 0.12 
D) 37.04 
A) 3.82 
B) 4.26 
C) 0.12 
D) 37.04

Question 14

Managers of cost centers are evaluated according to the profits which their departments are able to generate.

Accepted Answer

A) True 
 B)False

Question 15

The performance measures on a balanced scorecard tend to fall into four groups: financial measures, customer measures, internal business process measures, and external business process measures.

Accepted Answer

A) True 
 B)False

Question 16

The use of return on investment as a performance measure may lead managers to make decisions that are not in the best interests of the company as a whole.

Accepted Answer

A) True 
 B)False

Question 17

The division's residual income is closest to:

Accepted Answer

A) $575,100 
B) $1,175,100 
C) $(1,980,900) 
D) $(24,900) 
A) $575,100 
B) $1,175,100 
C) $(1,980,900) 
D) $(24,900)

Question 18

Durkee Corporation keeps careful track of the time required to fill orders. The times required for a particular order appear below:   Required:
a. Determine the throughput time. Show your work!
b. Determine the manufacturing cycle efficiency (MCE), Show your work!
c. Determine the delivery cycle time. Show your work!

Accepted Answer

a. Throughput time
= Process time + Insp

Question 19

Eckels Wares is a division of a major corporation. The following data are for the latest year of operations:   Required:
a. What is the division's margin?
b. What is the division's turnover?
c. What is the division's return on investment (ROI)?
d. What is the division's residual income?

Accepted Answer

a. Margin = Net operating income ÷ Sales

Question 20

The manufacturing cycle efficiency (MCE) was closest to:

Accepted Answer

A) 0.15 
B) 0.05 
C) 0.45 
D) 0.18 
A) 0.15 
B) 0.05 
C) 0.45 
D) 0.18

Division A's residual income is:

The division's return on investment (ROI) is closest to:

The margin in Year 2 was:

Average operating assets are $110,000 and net operating income is $23,100. The company invests $25,000 in new assets for a project that will increase net operating income by $4,750. What is the return on investment (ROI) of the new project?

Residual income is a better measure for performance evaluation of an investment center manager than return on investment because:

The throughput time was:

In computing the margin in a ROI analysis, which of the following is used?

The division's turnover is closest to:

The division's margin is closest to:

Garnick Corporation keeps careful track of the time required to fill orders. The times recorded for a particular order appear below: The delivery cycle time was:

What is the move time recorded for the operation?

The division's return on investment (ROI) is closest to:

The division's turnover is closest to:

Managers of cost centers are evaluated according to the profits which their departments are able to generate.

The performance measures on a balanced scorecard tend to fall into four groups: financial measures, customer measures, internal business process measures, and external business process measures.

The use of return on investment as a performance measure may lead managers to make decisions that are not in the best interests of the company as a whole.

The division's residual income is closest to:

Eckels Wares is a division of a major corporation. The following data are for the latest year of operations: Required: a. What is the division's margin? b. What is the division's turnover? c. What is the division's return on investment (ROI)? d. What is the division's residual income?

The manufacturing cycle efficiency (MCE) was closest to:

Managerial Accounting and Cost Concepts

Cost-Volume-Profit Relationships

Job-Order Costing

Variable Costing and Segment Reporting: Tools for Management

Activity-Based-Costing: a Tool to Aid Decision Making

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Capital Budgeting Decisions

Profit Planning

Flexible Budgets and Performance Analysis

Standard Costs and Variances

Managerial Accounting and Cost Concepts

Job-Order Costing

Activity-Based-Costing: a Tool to Aid Decision Making

A Capital Budgeting Decisions

Standard Costs and Variances

Performance Measurement in Decentralized Organizations

Performance Measurement in Decentralized Organizations

Profitability Analysis

Pricing Products and Services

Filters

Exam 13: Performance Measurement in Decentralized Organizations

Division A's residual income is:

The division's return on investment (ROI) is closest to:

The margin in Year 2 was:

Average operating assets are $110,000 and net operating income is $23,100. The company invests $25,000 in new assets for a project that will increase net operating income by $4,750. What is the return on investment (ROI) of the new project?

Residual income is a better measure for performance evaluation of an investment center manager than return on investment because:

The throughput time was:

In computing the margin in a ROI analysis, which of the following is used?

The division's turnover is closest to:

The division's margin is closest to:

Garnick Corporation keeps careful track of the time required to fill orders. The times recorded for a particular order appear below: The delivery cycle time was:

What is the move time recorded for the operation?

The division's return on investment (ROI) is closest to:

The division's turnover is closest to:

Managers of cost centers are evaluated according to the profits which their departments are able to generate.

The performance measures on a balanced scorecard tend to fall into four groups: financial measures, customer measures, internal business process measures, and external business process measures.

The use of return on investment as a performance measure may lead managers to make decisions that are not in the best interests of the company as a whole.

The division's residual income is closest to:

Eckels Wares is a division of a major corporation. The following data are for the latest year of operations: Required: a. What is the division's margin? b. What is the division's turnover? c. What is the division's return on investment (ROI)? d. What is the division's residual income?

The manufacturing cycle efficiency (MCE) was closest to:

Managerial Accounting and Cost Concepts

Cost-Volume-Profit Relationships

Job-Order Costing

Variable Costing and Segment Reporting: Tools for Management

Activity-Based-Costing: a Tool to Aid Decision Making

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Capital Budgeting Decisions

Profit Planning

Flexible Budgets and Performance Analysis

Standard Costs and Variances

Managerial Accounting and Cost Concepts

Job-Order Costing

Activity-Based-Costing: a Tool to Aid Decision Making

A Capital Budgeting Decisions

Standard Costs and Variances

Performance Measurement in Decentralized Organizations

Performance Measurement in Decentralized Organizations

Profitability Analysis

Pricing Products and Services

Filters