Question 1

What was the Consumer Products Division's residual income in March?

Accepted Answer

A) -$3,300 
B) $3,300 
C) -$7,812 
D) $7,812 
A) -$3,300 
B) $3,300 
C) -$7,812 
D) $7,812

Question 2

Which of the following three statements are correct? I. A profit center has control over both cost and revenue.
II) An investment center has control over invested funds, but not over costs and revenue.
III) A cost center has no control over sales

Accepted Answer

A) Only I 
B) Only II 
C) Only I and III 
D) Only I and II 
A) Only I 
B) Only II 
C) Only I and III 
D) Only I and II

Question 3

Residual income is the net operating income that an investment center earns above the minimum required return on the investment in operating assets.

Accepted Answer

A) True 
 B)False

Question 4

The division's residual income is closest to:

Accepted Answer

A) $(320,640) 
B) $1,119,360 
C) $399,360 
D) $(2,595,840) 
A) $(320,640) 
B) $1,119,360 
C) $399,360 
D) $(2,595,840)

Question 5

Sales in Year 1 amounted to:

Accepted Answer

A) $400,000 
B) $900,000 
C) $750,000 
D) $1,200,000 
A) $400,000 
B) $900,000 
C) $750,000 
D) $1,200,000

Question 6

The margin in Year 2 was:

Accepted Answer

A) 48% 
B) 32% 
C) 20% 
D) 10% 
A) 48% 
B) 32% 
C) 20% 
D) 10%

Question 7

What was the West Division's residual income in March?

Accepted Answer

A) -$6,700 
B) $6,700 
C) -$11,214 
D) $11,214 
A) -$6,700 
B) $6,700 
C) -$11,214 
D) $11,214

Question 8

Gilde Industries is a division of a major corporation. Last year the division had total sales of $23,380,000, net operating income of $2,828,980, and average operating assets of $7,000,000. The company's minimum required rate of return is 12%.
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)?

Accepted Answer

a. Margin = Net operating income ÷ Sales

Question 9

Mordue Corporation keeps careful track of the time required to fill orders. Data concerning a particular order appear below:   The manufacturing cycle efficiency (MCE) was closest to:

Accepted Answer

A) 0.15 
B) 0.53 
C) 0.05 
D) 0.16 
A) 0.15 
B) 0.53 
C) 0.05 
D) 0.16

Question 10

The delivery cycle time was:

Accepted Answer

A) 7.5 hours 
B) 29.1 hours 
C) 30.9 hours 
D) 3.1 hours 
A) 7.5 hours 
B) 29.1 hours 
C) 30.9 hours 
D) 3.1 hours

Question 11

During the most recent month at Coggan Corporation, queue time was 5.3 days, inspection time was 0.5 day, process time was 1.9 days, wait time was 4.5 days, and move time was 0.5 day.
Required:
a. Compute the throughput time.
b. Compute the manufacturing cycle efficiency (MCE).
c. What percentage of the production time is spent in non-value-added activities?
d. Compute the delivery cycle time.

Accepted Answer

a. Throughput time
= Process time + Insp

Question 12

The margin used in ROI calculations was closest to:

Accepted Answer

A) 18.00% 
B) 8.00% 
C) 6.67% 
D) 15.00% 
A) 18.00% 
B) 8.00% 
C) 6.67% 
D) 15.00%

Question 13

A company's current net operating income is $16,800 and its average operating assets are $80,000. The company's required rate of return is 18%. A new project being considered would require an investment of $15,000 and would generate annual net operating income of $3,000. What is the residual income of the new project?

Accepted Answer

A) 20.8% 
B) 20% 
C) ($150) 
D) $300 
A) 20.8% 
B) 20% 
C) ($150) 
D) $300

Question 14

What is the throughput (manufacturing cycle) time for the operation?

Accepted Answer

A) 12.0 hours 
B) 9.0 hours 
C) 10.0 hours 
D) 5.8 hours 
A) 12.0 hours 
B) 9.0 hours 
C) 10.0 hours 
D) 5.8 hours

Question 15

The delivery cycle time was:

Accepted Answer

A) 29.1 hours 
B) 30.6 hours 
C) 8 hours 
D) 2.7 hours 
A) 29.1 hours 
B) 30.6 hours 
C) 8 hours 
D) 2.7 hours

Question 16

The residual income was:

Accepted Answer

A) $18,000 
B) $10,000 
C) $12,000 
D) $16,000 
A) $18,000 
B) $10,000 
C) $12,000 
D) $16,000

Question 17

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

Accepted Answer

A) 8.9 hours 
B) 18 hours 
C) 4.5 hours 
D) 22.5 hours 
A) 8.9 hours 
B) 18 hours 
C) 4.5 hours 
D) 22.5 hours

Question 18

How many units must South sell each year to have an ROI of 16%?

Accepted Answer

A) 240,000 
B) 1,300,000 
C) 52,000 
D) 65,000 
A) 240,000 
B) 1,300,000 
C) 52,000 
D) 65,000

Question 19

In determining the dollar amount to use for operating assets in the return on investment (ROI) calculation, companies will generally use either net book value or gross cost of the assets. Which of the following is an argument for the use of net book value rather than gross cost?

Accepted Answer

A) It is consistent with how assets are reported on the balance sheet. 
B) It eliminates the depreciation method as a factor in ROI calculations. 
C) It encourages the replacement of old, worn-out equipment. 
D) all of these. 
A) It is consistent with how assets are reported on the balance sheet. 
B) It eliminates the depreciation method as a factor in ROI calculations. 
C) It encourages the replacement of old, worn-out equipment. 
D) all of these.

Question 20

The performance measures on an individual's scorecard should not be overly influenced by actions taken by others in the company or by events that are outside of the individual's control.

Accepted Answer

A) True 
 B)False

What was the Consumer Products Division's residual income in March?

Which of the following three statements are correct? I. A profit center has control over both cost and revenue. II) An investment center has control over invested funds, but not over costs and revenue. III) A cost center has no control over sales

Residual income is the net operating income that an investment center earns above the minimum required return on the investment in operating assets.

The division's residual income is closest to:

Sales in Year 1 amounted to:

The margin in Year 2 was:

What was the West Division's residual income in March?

Mordue Corporation keeps careful track of the time required to fill orders. Data concerning a particular order appear below: The manufacturing cycle efficiency (MCE) was closest to:

The delivery cycle time was:

The margin used in ROI calculations was closest to:

What is the throughput (manufacturing cycle) time for the operation?

The delivery cycle time was:

The residual income was:

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

How many units must South sell each year to have an ROI of 16%?

In determining the dollar amount to use for operating assets in the return on investment (ROI) calculation, companies will generally use either net book value or gross cost of the assets. Which of the following is an argument for the use of net book value rather than gross cost?

The performance measures on an individual's scorecard should not be overly influenced by actions taken by others in the company or by events that are outside of the individual's control.

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

What was the Consumer Products Division's residual income in March?

Which of the following three statements are correct? I. A profit center has control over both cost and revenue. II) An investment center has control over invested funds, but not over costs and revenue. III) A cost center has no control over sales

Residual income is the net operating income that an investment center earns above the minimum required return on the investment in operating assets.

The division's residual income is closest to:

Sales in Year 1 amounted to:

The margin in Year 2 was:

What was the West Division's residual income in March?

Mordue Corporation keeps careful track of the time required to fill orders. Data concerning a particular order appear below: The manufacturing cycle efficiency (MCE) was closest to:

The delivery cycle time was:

The margin used in ROI calculations was closest to:

What is the throughput (manufacturing cycle) time for the operation?

The delivery cycle time was:

The residual income was:

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

How many units must South sell each year to have an ROI of 16%?

In determining the dollar amount to use for operating assets in the return on investment (ROI) calculation, companies will generally use either net book value or gross cost of the assets. Which of the following is an argument for the use of net book value rather than gross cost?

The performance measures on an individual's scorecard should not be overly influenced by actions taken by others in the company or by events that are outside of the individual's control.

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