Exam 10: Decentralization: Responsibility, Accounting, Performance Evaluation, and Transfer Pricing

The following information pertains to the three divisions of Merrymount Company: What are the average operating assets for Division Y?

Which of the following is NOT a disadvantage of the ROI performance measure?

Return on investment (ROI) refers to earnings before interest and income taxes.

Transfer prices are the prices charged

EVA encourages the right kind of behavior from divisions because of its emphasis on

The following information pertains to the three divisions of Merrymount Company: What is the residual income for Division X?

The following information pertains to the three divisions of Merrymount Company: What are the sales for Division Y?

Goal congruence can be defined as

If the operating asset turnover increased by 50 percent and the margin increased by 50 percent, the ROI would increase by

Epsilon Division had the following information: If the asset base is decreased by $100,000, with no other changes, the return on investment of Epsilon Division will Be

The Hampton Division of Long Island Company sells all of its output to the Finishing Division of the company. The only product of the Hampton Division is chair legs that are used by the Finishing Division. The retail price of the legs is $20 per leg. Each chair completed by the Finishing Division requires four legs. Production quantity and cost data for 2016 are as follows: a. market price. b. variable product costs plus a fixed fee of 20 percent. c. full cost plus 20 percent markup. d. variable costs. e. full cost plus 10 percent markup.

Which of the following would be a reason why managers would NOT provide good service?

A manufacturing division of a company would most likely be evaluated as a(n)

In centralized organizations, lower-level managers are responsible only for implementing decisions.