Exam 12: Fundamentals of Management Control Systems

Fenway Telcom has three divisions,commercial,retail,and consumer,that share the common costs of the company's computer server network.The annual common costs are $2,400,000.You have been provided with the following information for the upcoming year: The cost accountant determined $1,700,000 of the server network's costs were fixed and should be allocated based on the number of connections.The remaining costs should be allocated based on the time on the network.What is the total server network costs allocated to the Commercial Division,assuming the company uses dual-rates to allocate common costs?

Cost allocations based on dual rates assume that a common cost can be separated into a fixed and variable component.The dual refers to fixed and variable.

The Document Creation Center (DCC)for Alegis Corp.provides photocopying and document services for three departments in the St.Paul office.The following budget has been prepared for the year. If DCC uses a dual-rate for allocating its costs,how much cost will be allocated to the Software Development Department,assuming the Software Development Department actually made 1,160,000 copies during the year?

Fenway Telcom has three divisions,commercial,retail,and consumer,that share the common costs of the company's computer server network.The annual common costs are $2,400,000.You have been provided with the following information for the upcoming year: What is the allocation rate for the upcoming year,assuming Fenway Telcom uses the single-rate method and allocates common costs based on the number of connections?

Assets invested in a responsibility center are included in a performance report of a:

In general,organizations are more centralized in the early stages of their existence and more decentralized as they grow.Decentralization normally is the result of growth.

The use of dual rates in a cost allocation system assumes that common costs can be:

Which of the following is not a benefit of decentralization?

Which of the following is considered a responsibility center?

The Copy Department in the College of Business at State University provides photocopying service for both the Marketing and Economics Department.The following budget has been prepared for the year. If the Copy Department uses a dual-rate for allocating its costs,how much cost will be allocated to the Marketing Department,assuming the Marketing Department actually made 3,000,000 copies during the year?

The Document Creation Center (DCC)for Alegis Corp.provides photocopying and document services for three departments in the St.Paul office.The following budget has been prepared for the year. If DCC uses a dual rate for allocating its costs based on usage,how much cost will be allocated to the Management Department?

In general,there is a direct relationship between the quality of the information provided to managers and the quality of decisions made using that information.Normally,the better the information,the higher the quality of the decision.

Cost allocation of shared facilities cost is intended to remind managers of:

In general,profit centers are found at higher levels in an organization than investment centers.Investment centers are found at higher levels.

When managers are held responsible for costs but the input-output relationship is not well specified,a(n)___________ is established.

When comparing performance report information for top management with that of lower-level management: (CMA adapted)

Rockford Manufacturing Corporation uses a responsibility accounting system in its operations.Which one of the following items is least likely to appear in a performance report for a manager of one of Rockford's assembly lines? (CMA adapted)

In responsibility accounting,a center's performance is measured by those costs which are controllable.Controllable costs are best described as including: (CMA adapted)

The Document Creation Center (DCC)for Alegis Corp.provides photocopying and document services for three departments in the St.Paul office.The following budget has been prepared for the year. If DCC uses a dual-rate for allocating its costs,how much cost will be allocated to the Management Department,assuming the Management Department actually made 2,950,000 copies during the year?

The Copy Department in the College of Business at State University provides photocopying service for both the Marketing and Economics Department.The following budget has been prepared for the year. If the Copy Department uses a dual-rate for allocating its costs,how much cost will be allocated to the Marketing Department,assuming the Marketing Department actually made 3,800,000 copies during the year?