Question 1

Harstin Corporation has provided the following data:  
-The margin for the past year was:

Accepted Answer

A)  19.2% 
B)  14.4% 
C)  11.2% 
D)  8.0% 
A)  19.2% 
B)  14.4% 
C)  11.2% 
D)  8.0%

Question 2

A company's average operating assets are $220,000 and its net operating income is $44,000. The company invested in a new project, increasing average assets to $250,000 and increasing its net operating income to $49,550. What is the project's residual income if the required rate of return is 20%?

Accepted Answer

A)  ($450) 
B)  $450 
C)  $600 
D)  ($600) 
A)  ($450) 
B)  $450 
C)  $600 
D)  ($600)

Question 3

Last year the House of Orange had sales of $826,650, net operating income of $81,000, and operating assets of $84,000 at the beginning of the year and $90,000 at the end of the year. What was the company's turnover rounded to the nearest tenth?

Accepted Answer

A)  9.5 
B)  10.2 
C)  9.8 
D)  9.2 
A)  9.5 
B)  10.2 
C)  9.8 
D)  9.2

Question 4

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

Accepted Answer

A)  9.9% 
B)  3.1% 
C)  34.5% 
D)  31.4% 
A)  9.9% 
B)  3.1% 
C)  34.5% 
D)  31.4%

Question 5

The emphasis in the balanced scorecard is on improvement rather than meeting a preset standard.

Accepted Answer

A) True 
 B)False

Question 6

The Holmes Division recorded operating data as follows for the past year:  
-For the past year, the return on investment was:

Accepted Answer

A)  15.75% 
B)  20.50% 
C)  25.00% 
D)  31.25% 
A)  15.75% 
B)  20.50% 
C)  25.00% 
D)  31.25%

Question 7

Data for December concerning Dinnocenzo Corporation's two major business segments-Fibers and Feedstocks-appear below:   
Common fixed expenses totaled $314,000 and were allocated as follows: $129,000 to the Fibers business segment and $185,000 to the Feedstocks business segment.
Required:
Prepare a segmented income statement in the contribution format for the company. Omit percentages; show only dollar amounts.

Accepted Answer

The answer of Data for December concerning Dinnocenzo Corporation's two...

Question 8

The Holmes Division recorded operating data as follows for the past year:  
-For the past year, the turnover was:

Accepted Answer

A)  25 
B)  10 
C)  4 
D)  2 
A)  25 
B)  10 
C)  4 
D)  2

Question 9

Which of the following will not result in an increase in return on investment (ROI), assuming other factors remain the same?

Accepted Answer

A)  A reduction in expenses. 
B)  An increase in net operating income. 
C)  An increase in operating assets. 
D)  An increase in sales. 
A)  A reduction in expenses. 
B)  An increase in net operating income. 
C)  An increase in operating assets. 
D)  An increase in sales.

Question 10

Return on investment (ROI) is equal to the margin multiplied by:

Accepted Answer

A)  sales. 
B)  turnover. 
C)  average operating assets. 
D)  residual income. 
A)  sales. 
B)  turnover. 
C)  average operating assets. 
D)  residual income.

Question 11

The Holmes Division recorded operating data as follows for the past year:  
-For the past year, the margin was:

Accepted Answer

A)  12.50% 
B)  13.00% 
C)  14.75% 
D)  15.00% 
A)  12.50% 
B)  13.00% 
C)  14.75% 
D)  15.00%

Question 12

Ceder Products is a division of a major corporation. Last year the division had total sales of $21,520,000, net operating income of $538,000, and average operating assets of $8,000,000. The company's minimum required rate of return is 18%.
-The division's residual income is closest to:

Accepted Answer

A)  $(902,000) 
B)  $(3,335,600) 
C)  $1,978,000 
D)  $538,000 
A)  $(902,000) 
B)  $(3,335,600) 
C)  $1,978,000 
D)  $538,000

Question 13

Deano 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)  $591,480 
B)  $(128,520) 
C)  $(1,698,120) 
D)  $1,311,480 
A)  $591,480 
B)  $(128,520) 
C)  $(1,698,120) 
D)  $1,311,480

Question 14

Return on investment (ROI) may not be fully controllable by a manager because of committed costs.

Accepted Answer

A) True 
 B)False

Question 15

Harstin Corporation has provided the following data:  
-The minimum required rate of return for the past year was:

Accepted Answer

A)  36% 
B)  8% 
C)  12% 
D)  40% 
A)  36% 
B)  8% 
C)  12% 
D)  40%

Question 16

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

Accepted Answer

A)  32.26 
B)  2.89 
C)  0.10 
D)  3.18 
A)  32.26 
B)  2.89 
C)  0.10 
D)  3.18

Question 17

The Axle Division of LaBate Company makes and sells only one product. Annual data on the Axle Division's single product follow:  
-If Axle sells 15,000 units per year, the residual income should be:

Accepted Answer

A)  $30,000 
B)  $100,000 
C)  $50,000 
D)  $10,000 
A)  $30,000 
B)  $100,000 
C)  $50,000 
D)  $10,000

Question 18

Financial data for Beaker Company for last year appear below:   
   
The company paid dividends of $2,100 last year. The "Investment in Cedar 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 Beaker Company has set a minimum required return of 20%. What was the company's residual income last year?

Accepted Answer

a. Operating assets do not include inves

Question 19

Kulp Corporation has two major business segments-East and West. In July, the East business segment had sales revenues of $900,000, variable expenses of $441,000, and traceable fixed expenses of $171,000. During the same month, the West business segment had sales revenues of $450,000, variable expenses of $234,000, and traceable fixed expenses of $45,000. The common fixed expenses totaled $321,000 and were allocated as follows: $180,000 to the East business segment and $141,000 to the West business segment.
-A properly constructed segmented income statement in a contribution format would show that the segment margin of the East business segment is:

Accepted Answer

A)  $288,000 
B)  $279,000 
C)  $108,000 
D)  $441,000 
A)  $288,000 
B)  $279,000 
C)  $108,000 
D)  $441,000

Question 20

Ieso Company has two stores: J and K. During November, Ieso Company reported a net operating income of $30,000 and sales of $450,000. The contribution margin in Store J was $100,000, or 40% of sales. The segment margin in Store K was $30,000, or 15% of sales. Traceable fixed expenses are $60,000 in Store J, and $40,000 in Store K.
-Ieso Company's total fixed expenses for the year were:

Accepted Answer

A)  $40,000 
B)  $100,000 
C)  $140,000 
D)  $170,000 
A)  $40,000 
B)  $100,000 
C)  $140,000 
D)  $170,000

Exam 12: Segment Reporting, Decentralization, and the Balanced Scorecard

Harstin Corporation has provided the following data: -The margin for the past year was:

A company's average operating assets are $220,000 and its net operating income is $44,000. The company invested in a new project, increasing average assets to $250,000 and increasing its net operating income to $49,550. What is the project's residual income if the required rate of return is 20%?

Last year the House of Orange had sales of $826,650, net operating income of $81,000, and operating assets of $84,000 at the beginning of the year and $90,000 at the end of the year. What was the company's turnover rounded to the nearest tenth?

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

The emphasis in the balanced scorecard is on improvement rather than meeting a preset standard.

The Holmes Division recorded operating data as follows for the past year: -For the past year, the return on investment was:

The Holmes Division recorded operating data as follows for the past year: -For the past year, the turnover was:

Which of the following will not result in an increase in return on investment (ROI), assuming other factors remain the same?

Return on investment (ROI) is equal to the margin multiplied by:

The Holmes Division recorded operating data as follows for the past year: -For the past year, the margin was:

Ceder Products is a division of a major corporation. Last year the division had total sales of $21,520,000, net operating income of $538,000, and average operating assets of $8,000,000. The company's minimum required rate of return is 18%. -The division's residual income is closest to:

Deano 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:

Return on investment (ROI) may not be fully controllable by a manager because of committed costs.

Harstin Corporation has provided the following data: -The minimum required rate of return for the past year was:

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

The Axle Division of LaBate Company makes and sells only one product. Annual data on the Axle Division's single product follow: -If Axle sells 15,000 units per year, the residual income should be:

Managerial Accounting and the Business Environment

Managerial Accounting and Cost Concepts

Systems Design: Job-Order Costing

Systems Design: Process Costing

Cost Behavior Analysis and Use

Cost-Volume-Profit Relationship

Variable Costing: a Tool for Management

Activity Based Costing: a Tool to Aid Decision-Making

Profit Planning

Flexible Budgets and Performance Analysis

Standard Costs and Operating Performance Measures

Relevant Costs for Decision Making

Capital Budgeting Decisions

How Well Am I Doing Statement of Cash Flows

How Well Am I Doing Financial Statement Analysis

Pricing Products and Services

Profitability Analysis

Further Classification of Labor Costs

Cost of Quality

the Predetermined Overhead Rate and Capacity

Fifo Method

Service Department Allocations

Least-Squares Regression Computations

Abc Action Analysis

Using a Modified Form of Activity-Based Costing to

Predetermined Overhead Rates and Overhead Analysis

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

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