Question 1

Average operating assets in Year 1 were:

Accepted Answer

A) $160,000 
B) $150,000 
C) $125,000 
D) $100,000 
A) $160,000 
B) $150,000 
C) $125,000 
D) $100,000

Question 2

All other things the same, which of the following would increase residual income?

Accepted Answer

A) Increase in average operating assets. 
B) Decrease in average operating assets. 
C) Increase in minimum required return. 
D) Decrease in net operating income. 
A) Increase in average operating assets. 
B) Decrease in average operating assets. 
C) Increase in minimum required return. 
D) Decrease in net operating income.

Question 3

Sales and average operating assets for Company P and Company Q are given below:     What is the margin that each company will have to earn in order to generate a return on investment of 20%?

Accepted Answer

A) 12% and 16% 
B) 50% and 100% 
C) 8% and 4% 
D) 2.5% and 5% 
A) 12% and 16% 
B) 50% and 100% 
C) 8% and 4% 
D) 2.5% and 5%

Question 4

Division A's sales are:

Accepted Answer

A) $400,000 
B) $625,000 
C) $125,000 
D) $200,000 
A) $400,000 
B) $625,000 
C) $125,000 
D) $200,000

Question 5

Residual income is superior to return on investment as a means of measuring performance because it encourages managers to make investment decisions that are more consistent with the interests of the company as a whole.

Accepted Answer

A) True 
 B)False

Question 6

Residual income equals average operating assets multiplied by the difference between the return on investment and the minimum required rate of return.

Accepted Answer

A) True 
 B)False

Question 7

Division B's average operating assets is:

Accepted Answer

A) $81,200 
B) $2,080,000 
C) $1,333,333 
D) $130,000 
A) $81,200 
B) $2,080,000 
C) $1,333,333 
D) $130,000

Question 8

Botelho Corporation keeps careful track of the time required to fill orders. Data concerning a particular order appear below:   The delivery cycle time was:

Accepted Answer

A) 33.1 hours 
B) 3.7 hours 
C) 12.6 hours 
D) 30.9 hours 
A) 33.1 hours 
B) 3.7 hours 
C) 12.6 hours 
D) 30.9 hours

Question 9

Galanis Corporation keeps careful track of the time required to fill orders. Data concerning a particular order appear below:   The throughput time was:

Accepted Answer

A) 38.8 hours 
B) 33.4 hours 
C) 14.1 hours 
D) 5.4 hours 
A) 38.8 hours 
B) 33.4 hours 
C) 14.1 hours 
D) 5.4 hours

Question 10

Sales in Year 2 amounted to:

Accepted Answer

A) $250,000 
B) $300,000 
C) $325,000 
D) $350,000 
A) $250,000 
B) $300,000 
C) $325,000 
D) $350,000

Question 11

Turnover is computed by dividing average operating assets into:

Accepted Answer

A) invested capital. 
B) total assets. 
C) net operating income. 
D) sales. 
A) invested capital. 
B) total assets. 
C) net operating income. 
D) sales.

Question 12

The division's margin is closest to:

Accepted Answer

A) 26.4% 
B) 10.0% 
C) 2.4% 
D) 24.0% 
A) 26.4% 
B) 10.0% 
C) 2.4% 
D) 24.0%

Question 13

Madrazo Corporation uses residual income to evaluate the performance of its divisions. The minimum required rate of return for performance evaluation purposes is 19%. The Games Division had average operating assets of $410,000 and net operating income of $86,000 in June.
Required:
What was the Games Division's residual income in June?

Accepted Answer

The answer of Madrazo Corporation uses residual income to evaluate...

Question 14

The purpose of the Data Processing Department of Falena Corporation is to assist the various departments of the corporation with their information needs free of charge. The Data Processing Department would best be evaluated as a:

Accepted Answer

A) cost center. 
B) revenue center. 
C) profit center. 
D) investment center. 
A) cost center. 
B) revenue center. 
C) profit center. 
D) investment center.

Question 15

If South wants a residual income of $50,000 and the minimum required rate of return is 10%, the annual turnover will have to be:

Accepted Answer

A) 0.32 
B) 0.80 
C) 1.25 
D) 1.50 
A) 0.32 
B) 0.80 
C) 1.25 
D) 1.50

Question 16

Heavey Fabrication is a division of a major corporation. Last year the division had total sales of $21,120,000, net operating income of $2,006,400, and average operating assets of $6,000,000. The company's minimum required rate of return is 12%.
Required:
What is the division's return on investment (ROI)?

Accepted Answer

ROI = Net operating

Question 17

The net operating income in Year 1 was:

Accepted Answer

A) $90,000 
B) $135,000 
C) $140,000 
D) $150,000 
A) $90,000 
B) $135,000 
C) $140,000 
D) $150,000

Question 18

The division's turnover is closest to:

Accepted Answer

A) 2.52 
B) 2.10 
C) 0.20 
D) 12.66 
A) 2.52 
B) 2.10 
C) 0.20 
D) 12.66

Question 19

Waltner Corporation's management reports that its average delivery cycle time is 20.0 days, its average throughput time is 7.5 days, its manufacturing cycle efficiency (MCE) is 0.32, its average move time is 0.2 day, and its average queue time is 4.0 days.
Required:
a. What is the wait time?
b. What is the process time?
c. What is the inspection time?

Accepted Answer

a. Delivery cycle time = Wait time + Thr

Question 20

The average operating assets amounted to:

Accepted Answer

A) $600,000 
B) $400,000 
C) $500,000 
D) $800,000 
A) $600,000 
B) $400,000 
C) $500,000 
D) $800,000

Average operating assets in Year 1 were:

All other things the same, which of the following would increase residual income?

Sales and average operating assets for Company P and Company Q are given below: What is the margin that each company will have to earn in order to generate a return on investment of 20%?

Division A's sales are:

Residual income is superior to return on investment as a means of measuring performance because it encourages managers to make investment decisions that are more consistent with the interests of the company as a whole.

Residual income equals average operating assets multiplied by the difference between the return on investment and the minimum required rate of return.

Division B's average operating assets is:

Botelho Corporation keeps careful track of the time required to fill orders. Data concerning a particular order appear below: The delivery cycle time was:

Galanis Corporation keeps careful track of the time required to fill orders. Data concerning a particular order appear below: The throughput time was:

Sales in Year 2 amounted to:

Turnover is computed by dividing average operating assets into:

The division's margin is closest to:

The purpose of the Data Processing Department of Falena Corporation is to assist the various departments of the corporation with their information needs free of charge. The Data Processing Department would best be evaluated as a:

If South wants a residual income of $50,000 and the minimum required rate of return is 10%, the annual turnover will have to be:

The net operating income in Year 1 was:

The division's turnover is closest to:

The average operating assets amounted 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

Average operating assets in Year 1 were:

All other things the same, which of the following would increase residual income?

Sales and average operating assets for Company P and Company Q are given below: What is the margin that each company will have to earn in order to generate a return on investment of 20%?

Division A's sales are:

Residual income is superior to return on investment as a means of measuring performance because it encourages managers to make investment decisions that are more consistent with the interests of the company as a whole.

Residual income equals average operating assets multiplied by the difference between the return on investment and the minimum required rate of return.

Division B's average operating assets is:

Botelho Corporation keeps careful track of the time required to fill orders. Data concerning a particular order appear below: The delivery cycle time was:

Galanis Corporation keeps careful track of the time required to fill orders. Data concerning a particular order appear below: The throughput time was:

Sales in Year 2 amounted to:

Turnover is computed by dividing average operating assets into:

The division's margin is closest to:

The purpose of the Data Processing Department of Falena Corporation is to assist the various departments of the corporation with their information needs free of charge. The Data Processing Department would best be evaluated as a:

If South wants a residual income of $50,000 and the minimum required rate of return is 10%, the annual turnover will have to be:

The net operating income in Year 1 was:

The division's turnover is closest to:

The average operating assets amounted 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