Question 1

Service level agreements are used within organisations to establish which services are to be provided and set the transfer price for these services.

Accepted Answer

A) True 
 B)False

Question 2

Fragrance Pty Ltd has two divisions: the Cologne Division and the Bottle Division.The company is decentralised and each division is evaluated as a profit centre.The Bottle Division produces bottles that can be used by the Cologne Division.The Bottle Division's variable manufacturing cost per unit is $2.00 and shipping costs are $0.10 per unit.The Bottle Division's external sales price is $3.00 per unit.No shipping costs are incurred on sales to the Cologne Division.The Cologne Division can purchase similar bottles in the external market for $2.50.Assume the Bottle Division has no excess capacity and can sell everything produced externally.Using the general rule,the transfer price from the Bottle Division to the Cologne Division would be:

Accepted Answer

A)  $2.10 
B)  $2.50 
C)  $2.90 
D)  $3.00 
A)  $2.10 
B)  $2.50 
C)  $2.90 
D)  $3.00

Question 3

Which of the following are characteristics of shared service units?
i.Head office dominates
ii.Usually structured as a cost centre
iii.Services tend to be standardised

Accepted Answer

A)  i and ii 
B)  i and iii 
C)  ii and iii 
D)  None of the given answers 
A)  i and ii 
B)  i and iii 
C)  ii and iii 
D)  None of the given answers

Question 4

Which of the following is not an example of a responsibility centre?

Accepted Answer

A)  Corporate centre 
B)  Revenue centre 
C)  Profit centre 
D)  Investment centre 
A)  Corporate centre 
B)  Revenue centre 
C)  Profit centre 
D)  Investment centre

Question 5

When management is using performance reports to evaluate the performance of a business unit manager,which of the following costs should be considered:

Accepted Answer

A)  Any costs that are attributable to the business unit 
B)  Common costs and any costs that are attributable to the business unit 
C)  Costs controllable by the business unit manager,common costs,and any costs that are attributable to the business unit 
D)  Only costs controllable by the business unit manager 
A)  Any costs that are attributable to the business unit 
B)  Common costs and any costs that are attributable to the business unit 
C)  Costs controllable by the business unit manager,common costs,and any costs that are attributable to the business unit 
D)  Only costs controllable by the business unit manager

Question 6

Business unit profit and loss statements show:

Accepted Answer

A)  profits for the major responsibility centres and for the organisation as a whole 
B)  profits by quarter for the organisation as a whole 
C)  comparative profits by year for the organisation as a whole 
D)  All of the given answers 
A)  profits for the major responsibility centres and for the organisation as a whole 
B)  profits by quarter for the organisation as a whole 
C)  comparative profits by year for the organisation as a whole 
D)  All of the given answers

Question 7

Which of the following statements about business unit reporting is/are true?
i.Business unit reports distinguish between costs that are controllable by the business unit manager and costs that are beyond the influence of the business unit manager
ii.These statements must be presented in an absorption-costing format.
iii.Business unit reporting shows profit and loss statements for the company as a whole and for its major business units.

Accepted Answer

A)  i and ii 
B)  All of the given answers 
C)  i and iii 
D)  ii and iii 
A)  i and ii 
B)  All of the given answers 
C)  i and iii 
D)  ii and iii

Question 8

One advantage of business unit reports is that they make a distinction between business units and:

Accepted Answer

A)  business unit managers 
B)  budgets 
C)  allocated costs 
D)  cost objects 
A)  business unit managers 
B)  budgets 
C)  allocated costs 
D)  cost objects

Service level agreements are used within organisations to establish which services are to be provided and set the transfer price for these services.

Which of the following are characteristics of shared service units? i.Head office dominates ii.Usually structured as a cost centre iii.Services tend to be standardised

Which of the following is not an example of a responsibility centre?

When management is using performance reports to evaluate the performance of a business unit manager,which of the following costs should be considered:

Business unit profit and loss statements show:

One advantage of business unit reports is that they make a distinction between business units and:

Management Accounting: Information for Creating Value and Managing Resources

Management Accounting: Cost Terms and Concepts

Cost Behaviour, Cost Drivers and Cost Estimation

Product Costing Systems

Process Costing and Operation Costing

Service Costing

A Closer Look at Overhead Costs

Activity-Based Costing

Budgeting Systems

Standard Costs for Control: Direct Material and Direct Labour

Standard Costs for Control: Flexible Budgets and Manufacturing Overhead

Financial Performance Measures and Incentive Schemes

Strategic Performance Measurement Systems

Managing Suppliers and Customers

Managing Costs and Quality

Sustainability and Management Accounting

Cost Volume Profit Analysis

Information for Decisions: Relevant Costs and Benefits

Pricing and Product Mix Decisions

Information for Capital Expenditure Decisions

Filters

Exam 12: Managing and Reporting Performance

Service level agreements are used within organisations to establish which services are to be provided and set the transfer price for these services.

Which of the following are characteristics of shared service units? i.Head office dominates ii.Usually structured as a cost centre iii.Services tend to be standardised

Which of the following is not an example of a responsibility centre?

When management is using performance reports to evaluate the performance of a business unit manager,which of the following costs should be considered:

Business unit profit and loss statements show:

One advantage of business unit reports is that they make a distinction between business units and:

Management Accounting: Information for Creating Value and Managing Resources

Management Accounting: Cost Terms and Concepts

Cost Behaviour, Cost Drivers and Cost Estimation

Product Costing Systems

Process Costing and Operation Costing

Service Costing

A Closer Look at Overhead Costs

Activity-Based Costing

Budgeting Systems

Standard Costs for Control: Direct Material and Direct Labour

Standard Costs for Control: Flexible Budgets and Manufacturing Overhead

Financial Performance Measures and Incentive Schemes

Strategic Performance Measurement Systems

Managing Suppliers and Customers

Managing Costs and Quality

Sustainability and Management Accounting

Cost Volume Profit Analysis

Information for Decisions: Relevant Costs and Benefits

Pricing and Product Mix Decisions

Information for Capital Expenditure Decisions

Filters