Question 1

Land held for possible plant expansion would not be included as an operating asset when computing return on investment (ROI).

Accepted Answer

A) True 
 B)False

Question 2

Financial data for Redstone Company for last year appear below:     The company paid dividends of $32,200 last year.The "Investment in Balsam Company" on the statement of financial position represents an investment in the stock of another company.
Required:
a.Compute the company's margin,turnover,and return on investment for last year.
b.The Board of Directors of Redstone has set a minimum required return of 25%.What was the company's residual income last year?

Accepted Answer

a.Operating assets do not include invest

Question 3

For the past year,Allargando Company recorded sales of $500,000 and average operating assets of $250,000.What is the margin that Allargando Company needed to earn in order to achieve an ROI of 12%?

Accepted Answer

A) 6.00% 
B) 12.00% 
C) 2.00% 
D) 8.33% 
A) 6.00% 
B) 12.00% 
C) 2.00% 
D) 8.33%

Question 4

Given the following data:   Return on investment (ROI)would be:

Accepted Answer

A) 5% 
B) 12% 
C) 25% 
D) 60% 
A) 5% 
B) 12% 
C) 25% 
D) 60%

Question 5

Jolin Corporation keeps careful track of the time required to fill orders.The times recorded for a particular order appear below:   The manufacturing cycle efficiency (MCE)was closest to:

Accepted Answer

A) 0.03 
B) 0.16 
C) 0.10 
D) 0.48 
A) 0.03 
B) 0.16 
C) 0.10 
D) 0.48

Question 6

The North Division of the Lyman Company reported the following data for last year:   The return on investment last year for the North Division was:

Accepted Answer

A) 18% 
B) 40% 
C) 36% 
D) 80% 
A) 18% 
B) 40% 
C) 36% 
D) 80%

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

A disadvantage of using ROI to evaluate performance is that it encourages the manager to reduce the investment in operating assets as well as increase net operating income.

Accepted Answer

A) True 
 B)False

Question 9

Last year a company had sales of $400,000,a turnover of 2.4,and a return on investment of 36%.The company's net operating income for the year was:

Accepted Answer

A) $144,000 
B) $120,000 
C) $80,000 
D) $60,000 
A) $144,000 
B) $120,000 
C) $80,000 
D) $60,000

Question 10

Margin equals net operating income divided by sales.

Accepted Answer

A) True 
 B)False

Question 11

Garde 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) 36.2 hours 
B) 8.1 hours 
C) 3.3 hours 
D) 32.9 hours 
A) 36.2 hours 
B) 8.1 hours 
C) 3.3 hours 
D) 32.9 hours

Question 12

Cabal Products is a division of a major corporation.Last year the division had total sales of $10,040,000,net operating income of $582,320,and average operating assets of $4,000,000.The company's minimum required rate of return is 14%. The division's margin is closest to:

Accepted Answer

A) 5.8% 
B) 45.6% 
C) 14.6% 
D) 39.8% 
A) 5.8% 
B) 45.6% 
C) 14.6% 
D) 39.8%

Question 13

Pardun Corporation's management keeps track of the time it takes to process orders.During the most recent month,the following average times were recorded per order:   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

Question 14

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

Accepted Answer

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

Question 15

Daab Products is a division of a major corporation.The following data are for the most recent year of operations:   The division's margin used to compute ROI is closest to:

Accepted Answer

A) 2.8% 
B) 28.8% 
C) 10.8% 
D) 26.0% 
A) 2.8% 
B) 28.8% 
C) 10.8% 
D) 26.0%

Question 16

A cost center is not a responsibility center.

Accepted Answer

A) True 
 B)False

Question 17

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 18

Aguilera Industries is a division of a major corporation.Data concerning the most recent year appears below:   The division's return on investment (ROI)is closest to:

Accepted Answer

A) 2.1% 
B) 29.2% 
C) 22.6% 
D) 5.8% 
A) 2.1% 
B) 29.2% 
C) 22.6% 
D) 5.8%

Question 19

Ebsen 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) 0.84 
B) 0.04 
C) 0.17 
D) 0.09 
A) 0.84 
B) 0.04 
C) 0.17 
D) 0.09

Question 20

Wait time is considered non-value-added time.

Accepted Answer

A) True 
 B)False

Land held for possible plant expansion would not be included as an operating asset when computing return on investment (ROI).

For the past year,Allargando Company recorded sales of $500,000 and average operating assets of $250,000.What is the margin that Allargando Company needed to earn in order to achieve an ROI of 12%?

Given the following data: Return on investment (ROI)would be:

Jolin Corporation keeps careful track of the time required to fill orders.The times recorded for a particular order appear below: The manufacturing cycle efficiency (MCE)was closest to:

The North Division of the Lyman Company reported the following data for last year: The return on investment last year for the North Division was:

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

A disadvantage of using ROI to evaluate performance is that it encourages the manager to reduce the investment in operating assets as well as increase net operating income.

Last year a company had sales of $400,000,a turnover of 2.4,and a return on investment of 36%.The company's net operating income for the year was:

Margin equals net operating income divided by sales.

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

Cabal Products is a division of a major corporation.Last year the division had total sales of $10,040,000,net operating income of $582,320,and average operating assets of $4,000,000.The company's minimum required rate of return is 14%. The division's margin is closest to:

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

Daab Products is a division of a major corporation.The following data are for the most recent year of operations: The division's margin used to compute ROI is closest to:

A cost center is not a responsibility center.

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:

Aguilera Industries is a division of a major corporation.Data concerning the most recent year appears below: The division's return on investment (ROI)is closest to:

Ebsen 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:

Wait time is considered non-value-added time.

Managerial Accounting and Cost Concepts

Job-Order Costing: Calculating Unit Production Costs

Job-Order Costing: Cost Flows and External Reporting

Process Costing

Supplement: Process Costing Using the Fifo Method

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Activity-Based Costing: a Tool to Aid Decision Making

Master Budgeting

Differential Analysis: The Key to Decision Making

Performance Measurement in Decentralized Organizations

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Journal Entries to Record Variance

The Concept of Present Value

The Direct Method of Determining the Net Cash Provided by Operating Activities

Filters

Exam 10: Flexible Budgets and Performance Analysis

Land held for possible plant expansion would not be included as an operating asset when computing return on investment (ROI).

For the past year,Allargando Company recorded sales of $500,000 and average operating assets of $250,000.What is the margin that Allargando Company needed to earn in order to achieve an ROI of 12%?

Given the following data: Return on investment (ROI)would be:

Jolin Corporation keeps careful track of the time required to fill orders.The times recorded for a particular order appear below: The manufacturing cycle efficiency (MCE)was closest to:

The North Division of the Lyman Company reported the following data for last year: The return on investment last year for the North Division was:

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

A disadvantage of using ROI to evaluate performance is that it encourages the manager to reduce the investment in operating assets as well as increase net operating income.

Last year a company had sales of $400,000,a turnover of 2.4,and a return on investment of 36%.The company's net operating income for the year was:

Margin equals net operating income divided by sales.

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

Cabal Products is a division of a major corporation.Last year the division had total sales of $10,040,000,net operating income of $582,320,and average operating assets of $4,000,000.The company's minimum required rate of return is 14%. The division's margin is closest to:

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

Daab Products is a division of a major corporation.The following data are for the most recent year of operations: The division's margin used to compute ROI is closest to:

A cost center is not a responsibility center.

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:

Aguilera Industries is a division of a major corporation.Data concerning the most recent year appears below: The division's return on investment (ROI)is closest to:

Ebsen 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:

Wait time is considered non-value-added time.

Managerial Accounting and Cost Concepts

Job-Order Costing: Calculating Unit Production Costs

Job-Order Costing: Cost Flows and External Reporting

Process Costing

Supplement: Process Costing Using the Fifo Method

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Activity-Based Costing: a Tool to Aid Decision Making

Master Budgeting

Differential Analysis: The Key to Decision Making

Performance Measurement in Decentralized Organizations

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Journal Entries to Record Variance

The Concept of Present Value

The Direct Method of Determining the Net Cash Provided by Operating Activities

Filters