Question 1

A cost center is not a responsibility center.

Accepted Answer

A) True 
 B)False

Question 2

Baad Industries is a division of a major corporation.Last year the division had total sales of $20, 440, 000, net operating income of $1, 860, 040, and average operating assets of $7, 000, 000. The division's return on investment (ROI)is closest to:

Accepted Answer

A) 21.0% 
B) 26.6% 
C) 6.8% 
D) 2.5% 
A) 21.0% 
B) 26.6% 
C) 6.8% 
D) 2.5%

Question 3

ROI and residual income are tools used to evaluate managerial performance in profit centers.

Accepted Answer

A) True 
 B)False

Question 4

A profit center is responsible for generating revenue and for controlling costs.

Accepted Answer

A) True 
 B)False

Question 5

The following information relates to last year's operations at the Paper Division of Germane Corporation:   What was the Paper Division's net operating income last year?

Accepted Answer

A) $24, 300 
B) $29, 160 
C) $145, 800 
D) $162, 000 
A) $24, 300 
B) $29, 160 
C) $145, 800 
D) $162, 000

Question 6

Last year the Uptown Division of Gorcen Enterprises had sales of $300, 000 and a net operating income of $24, 000.The average operating assets at Uptown last year amounted to $120, 000. At Uptown the turnover used to calculate ROI last year was:

Accepted Answer

A) 0.4 
B) 2.5 
C) 3.2 
D) 5.0 
A) 0.4 
B) 2.5 
C) 3.2 
D) 5.0

Question 7

Gaal Industries is a division of a major corporation.Last year the division had total sales of $26, 110, 000, net operating income of $1, 801, 590, and average operating assets of $7, 000, 000.The company's minimum required rate of return is 18%.
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 8

A company that is seeking to increase ROI should attempt to decrease:

Accepted Answer

A) sales. 
B) turnover. 
C) margin. 
D) average operating assets. 
A) sales. 
B) turnover. 
C) margin. 
D) average operating assets.

Question 9

Throughput Time consists of:

Accepted Answer

A) Process Time. 
B) Inspection Time and Move Time. 
C) Process Time, Inspection Time, and Move Time. 
D) Process Time, Inspection Time, Move Time, and Queue Time. 
A) Process Time. 
B) Inspection Time and Move Time. 
C) Process Time, Inspection Time, and Move Time. 
D) Process Time, Inspection Time, Move Time, and Queue Time.

Question 10

Brandon, Inc.has provided the following data for last year's operations:   Brandon's residual income is:

Accepted Answer

A) $2, 000 
B) $4, 000 
C) $3, 500 
D) $2, 500 
A) $2, 000 
B) $4, 000 
C) $3, 500 
D) $2, 500

Question 11

Operating assets include cash, accounts receivable, and inventory but not any depreciable fixed assets.

Accepted Answer

A) True 
 B)False

Question 12

Consider the following three conditions: I.An increase in sales
II)An increase in operating assets
III)A reduction in expenses
Which of the above conditions provide a way in which a manager can improve return on investment?

Accepted Answer

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

Question 13

Process Time is the only non-value-added component of Throughput Time.

Accepted Answer

A) True 
 B)False

Question 14

In September, the Universal Solutions Division of Mcallister Corporation had average operating assets of $120, 000 and net operating income of $12, 800.The company uses residual income, with a minimum required rate of return of 12%, to evaluate the performance of its divisions.What was the Universal Solutions Division's residual income in September?

Accepted Answer

A) -$1, 600 
B) $1, 600 
C) -$1, 536 
D) $1, 536 
A) -$1, 600 
B) $1, 600 
C) -$1, 536 
D) $1, 536

Question 15

Queue time is considered value-added time.

Accepted Answer

A) True 
 B)False

Question 16

The following information relates to the Quilt Division of TDS Corporation for last year:   Assume that Quilt was being evaluated solely on the basis of residual income.Which of the following investment opportunities would Quilt want to invest in?

Accepted Answer

A) Option A 
B) Option B 
C) Option C 
D) Option D 
A) Option A 
B) Option B 
C) Option C 
D) Option D

Question 17

Eacher 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 18

Managerial performance can be measured in many different ways including return on investment (ROI)and residual income.A good reason for using residual income instead of ROI is:

Accepted Answer

A) Residual income can be computed without having to measure operating assets. 
B) Managers are more likely to accept projects that are beneficial to the company. 
C) ROI does not take into account both turnover and margin. 
D) A minimum rate of return does not have to be specified when the residual income approach is used. 
A) Residual income can be computed without having to measure operating assets. 
B) Managers are more likely to accept projects that are beneficial to the company. 
C) ROI does not take into account both turnover and margin. 
D) A minimum rate of return does not have to be specified when the residual income approach is used.

Question 19

Mccubbin 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) 25.0 hours 
B) 13.1 hours 
C) 27.0 hours 
D) 3.5 hours 
A) 25.0 hours 
B) 13.1 hours 
C) 27.0 hours 
D) 3.5 hours

Question 20

During the most recent month at Luinstra Corporation, queue time was 4.5 days, inspection time was 0.8 day, process time was 1.9 days, wait time was 5.1 days, and move time was 0.7 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 + Inspe

A cost center is not a responsibility center.

Baad Industries is a division of a major corporation.Last year the division had total sales of $20, 440, 000, net operating income of $1, 860, 040, and average operating assets of $7, 000, 000. The division's return on investment (ROI)is closest to:

ROI and residual income are tools used to evaluate managerial performance in profit centers.

A profit center is responsible for generating revenue and for controlling costs.

The following information relates to last year's operations at the Paper Division of Germane Corporation: What was the Paper Division's net operating income last year?

Last year the Uptown Division of Gorcen Enterprises had sales of $300, 000 and a net operating income of $24, 000.The average operating assets at Uptown last year amounted to $120, 000. At Uptown the turnover used to calculate ROI last year was:

A company that is seeking to increase ROI should attempt to decrease:

Throughput Time consists of:

Brandon, Inc.has provided the following data for last year's operations: Brandon's residual income is:

Operating assets include cash, accounts receivable, and inventory but not any depreciable fixed assets.

Consider the following three conditions: I.An increase in sales II)An increase in operating assets III)A reduction in expenses Which of the above conditions provide a way in which a manager can improve return on investment?

Process Time is the only non-value-added component of Throughput Time.

Queue time is considered value-added time.

The following information relates to the Quilt Division of TDS Corporation for last year: Assume that Quilt was being evaluated solely on the basis of residual income.Which of the following investment opportunities would Quilt want to invest in?

Eacher 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?

Managerial performance can be measured in many different ways including return on investment (ROI)and residual income.A good reason for using residual income instead of ROI is:

Mccubbin 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:

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

Profit Planning

Flexible Budgets and Performance Analysis

Standard Costs and Variances

Pricing Products and Services

Profitability Analysis

Least Squares Regression Computations

Activity-Based Absorption Costing

the Predetermined Overhead Rate and Capacity

Super-Variable Costing

Abc Action Analysis

the Concept of Present Value

Income Taxes and the Net Present Value Method

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Transfer Pricing

Service Department Charges

Filters

Exam 11: Performance Measurement in Decentralized Organizations

A cost center is not a responsibility center.

Baad Industries is a division of a major corporation.Last year the division had total sales of $20, 440, 000, net operating income of $1, 860, 040, and average operating assets of $7, 000, 000. The division's return on investment (ROI)is closest to:

ROI and residual income are tools used to evaluate managerial performance in profit centers.

A profit center is responsible for generating revenue and for controlling costs.

The following information relates to last year's operations at the Paper Division of Germane Corporation: What was the Paper Division's net operating income last year?

Last year the Uptown Division of Gorcen Enterprises had sales of $300, 000 and a net operating income of $24, 000.The average operating assets at Uptown last year amounted to $120, 000. At Uptown the turnover used to calculate ROI last year was:

A company that is seeking to increase ROI should attempt to decrease:

Throughput Time consists of:

Brandon, Inc.has provided the following data for last year's operations: Brandon's residual income is:

Operating assets include cash, accounts receivable, and inventory but not any depreciable fixed assets.

Consider the following three conditions: I.An increase in sales II)An increase in operating assets III)A reduction in expenses Which of the above conditions provide a way in which a manager can improve return on investment?

Process Time is the only non-value-added component of Throughput Time.

Queue time is considered value-added time.

The following information relates to the Quilt Division of TDS Corporation for last year: Assume that Quilt was being evaluated solely on the basis of residual income.Which of the following investment opportunities would Quilt want to invest in?

Eacher 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?

Managerial performance can be measured in many different ways including return on investment (ROI)and residual income.A good reason for using residual income instead of ROI is:

Mccubbin 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:

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

Profit Planning

Flexible Budgets and Performance Analysis

Standard Costs and Variances

Pricing Products and Services

Profitability Analysis

Least Squares Regression Computations

Activity-Based Absorption Costing

the Predetermined Overhead Rate and Capacity

Super-Variable Costing

Abc Action Analysis

the Concept of Present Value

Income Taxes and the Net Present Value Method

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Transfer Pricing

Service Department Charges

Filters