Question 1

Estes Company has assembled the following data for its divisions for the past year: 
-Division A's residual income is:

Accepted Answer

A) $20,000 
B) $30,000 
C) $35,000 
D) $45,000 
A) $20,000 
B) $30,000 
C) $35,000 
D) $45,000

Question 2

Average operating assets are $110,000 and net operating income is $23,100.The company invests $25,000 in new assets for a project that will increase net operating income by $4,750.What is the return on investment (ROI)of the new project?

Accepted Answer

A) 21% 
B) 19% 
C) 18.5% 
D) 20% 
A) 21% 
B) 19% 
C) 18.5% 
D) 20%

Question 3

Reed Company's sales last year totaled $150,000 and its return on investment (ROI)was 12%.If the company's turnover was 3,then its net operating income for the year must have been:

Accepted Answer

A) $6,000 
B) $2,000 
C) $18,000 
D) it is impossible to determine from the data given. 
A) $6,000 
B) $2,000 
C) $18,000 
D) it is impossible to determine from the data given.

Question 4

Saffer 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) 9.3 hours 
B) 4.9 hours 
C) 30.9 hours 
D) 26 hours 
A) 9.3 hours 
B) 4.9 hours 
C) 30.9 hours 
D) 26 hours

Question 5

Chace Products is a division of a major corporation. Last year the division had total sales of $21,300,000, net operating income of $575,100, and average operating assets of $5,000,000. The company's minimum required rate of return is 12%.
-The throughput time was:

Accepted Answer

A) 4.2 hours 
B) 9.5 hours 
C) 30.6 hours 
D) 26.4 hours 
A) 4.2 hours 
B) 9.5 hours 
C) 30.6 hours 
D) 26.4 hours

Question 6

Niemiec 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) 0.20 
B) 0.06 
C) 0.12 
D) 0.96 
A) 0.20 
B) 0.06 
C) 0.12 
D) 0.96

Question 7

The Reed Division reports the following operating data for the past two years:  The return on investment at Reed was exactly the same in Year 1 and Year 2.
-Net operating income in Year 2 amounted to:

Accepted Answer

A) $60,000 
B) $50,000 
C) $40,000 
D) $35,000 
A) $60,000 
B) $50,000 
C) $40,000 
D) $35,000

Question 8

Managers of cost centers are evaluated according to the profits which their departments are able to generate.

Accepted Answer

A) True 
 B)False

Question 9

The following data are available for the South Division of Redride Products, Inc. and the single product it makes:  
-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 10

Beall Industries is a division of a major corporation. Last year the division had total sales of $20,160,000, net operating income of $1,592,640, and average operating assets of $8,000,000.
-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 11

Dickonson Products is a division of a major corporation. The following data are for the last year of operations:  
-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 12

Dickonson Products is a division of a major corporation. The following data are for the last year of operations:  
-The division's return on investment (ROI)is closest to:

Accepted Answer

A) 0.2% 
B) 41.6% 
C) 10.0% 
D) 1.9% 
A) 0.2% 
B) 41.6% 
C) 10.0% 
D) 1.9%

Question 13

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 14

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 15

The division's turnover is closest to:

Accepted Answer

A) 20.00 
B) 4.35 
C) 0.22 
D) 3.57 
A) 20.00 
B) 4.35 
C) 0.22 
D) 3.57

Question 16

Chace Products is a division of a major corporation. Last year the division had total sales of $21,300,000, net operating income of $575,100, and average operating assets of $5,000,000. The company's minimum required rate of return is 12%.
-The division's turnover is closest to:

Accepted Answer

A) 3.82 
B) 4.26 
C) 0.12 
D) 37.04 
A) 3.82 
B) 4.26 
C) 0.12 
D) 37.04

Question 17

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 18

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

Question 19

The Reed Division reports the following operating data for the past two years:  The return on investment at Reed was exactly the same in Year 1 and Year 2.
-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 20

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

Exam 10: Performance Measurement in Decentralized Organizations

Estes Company has assembled the following data for its divisions for the past year: -Division A's residual income is:

Average operating assets are $110,000 and net operating income is $23,100.The company invests $25,000 in new assets for a project that will increase net operating income by $4,750.What is the return on investment (ROI)of the new project?

Reed Company's sales last year totaled $150,000 and its return on investment (ROI)was 12%.If the company's turnover was 3,then its net operating income for the year must have been:

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

Chace Products is a division of a major corporation. Last year the division had total sales of $21,300,000, net operating income of $575,100, and average operating assets of $5,000,000. The company's minimum required rate of return is 12%. -The throughput time was:

Niemiec 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 Reed Division reports the following operating data for the past two years: The return on investment at Reed was exactly the same in Year 1 and Year 2. -Net operating income in Year 2 amounted to:

Managers of cost centers are evaluated according to the profits which their departments are able to generate.

The following data are available for the South Division of Redride Products, Inc. and the single product it makes: -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:

Beall Industries is a division of a major corporation. Last year the division had total sales of $20,160,000, net operating income of $1,592,640, and average operating assets of $8,000,000. -The division's turnover is closest to:

Dickonson Products is a division of a major corporation. The following data are for the last year of operations: -The division's residual income is closest to:

Dickonson Products is a division of a major corporation. The following data are for the last year of operations: -The division's return on investment (ROI)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:

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 division's turnover is closest to:

Chace Products is a division of a major corporation. Last year the division had total sales of $21,300,000, net operating income of $575,100, and average operating assets of $5,000,000. The company's minimum required rate of return is 12%. -The division's turnover is closest to:

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

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.

The Reed Division reports the following operating data for the past two years: The return on investment at Reed was exactly the same in Year 1 and Year 2. -Sales in Year 2 amounted to:

Managerial Accounting and Cost Concepts

Job-Order Costing

Process Costing

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Activity-Based Costing: a Tool to Aid Decision Making

Profit Planning

Flexible Budgets and Performance Analysis

Standard Costs and Variances

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Statement of Cash Flows

Financial Statement Analysis

Least-Squares Regression Computations

Appendix B: Cost of Quality

The Predetermined Overhead Rate and Capacity

Further Classification of Labor Costs

Fifo Method

Service Department Allocations

Abc Action Analysis

Using a Modified Form of Activity-Based Costing to Determine Product Costs for External Reports

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Journal Entries to Record Variances

Transfer Pricing

Service Department Charges

The Concept of Present Value

Income Taxes in Capital Budgeting Decisions

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

Pricing Products and Services

Profitability Analysis

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