Question 1

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 residual income is closest to:

Accepted Answer

A) $582,320 
B) $22,320 
C) $(823,280) 
D) $1,142,320

Question 2

The following data pertain to operations at Quick Incorporated:

-The wait time for this operation would be:

Accepted Answer

A) 4 hours 
B) 2 hours 
C) 8 hours 
D) cannot be determined from information provided

Question 3

A balanced scorecard should not contain any performance measures concerning customer satisfaction since the extent to which customers are satisfied is beyond the control of any manager in the company.

Accepted Answer

A) True 
 B)False

Question 4

Ebsen 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) 30.5 hours 
B) 4.5 hours 
C) 13.9 hours 
D) 26 hours

Question 5

Because continuous improvement is very difficult, the emphasis in the balanced scorecard tends to be on meeting preset standards.

Accepted Answer

A) True 
 B)False

Question 6

Manufacturing Cycle Efficiency (MCE) is computed as:

Accepted Answer

A) Throughput Time ÷ Delivery Cycle Time. 
B) Process Time ÷ Delivery Cycle Time. 
C) Value-Added Time ÷ Throughput Time. 
D) Value-Added Time ÷ Delivery-Cycle Time.

Question 7

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

The answer of Pardun Corporation's management keeps track of the...

Question 8

The following data pertain to operations at Quick Incorporated:

-The combined inspection and move time for this operation would be:

Accepted Answer

A) 4 hours 
B) 1 hour 
C) 2 hours 
D) cannot be determined from information provided

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Fruchter Corporation keeps careful track of the time required to fill orders. The times recorded for a particular order appear below:  The throughput time was:

Accepted Answer

A) 4.6 hours 
B) 32.8 hours 
C) 11.0 hours 
D) 37.4 hours

Question 11

The Jenkins Division recorded operating data as follows for the past year:

-For the past year, the return on investment was:

Accepted Answer

A) 5% 
B) 15% 
C) 30% 
D) 25%

Question 12

Brandon, Inc. has provided the following data for last year's operations:

-Brandon's return on investment (ROI) is:

Accepted Answer

A) 6% 
B) 10% 
C) 15% 
D) 24%

Question 13

Brletich 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) 9.1 hours 
B) 21.1 hours 
C) 22.5 hours 
D) 3.7 hours

Question 14

The following information relates to the Quilt Division of TDS Corporation for last year:

-Assume that Quilt was being evaluated solely on the basis of residual income. Which of the following investment opportunities would Quilt want to invest in?

Accepted Answer

A) Option A 
B) Option B 
C) Option C 
D) Option D

Question 15

Last year the Uptown Division of Gorcen Enterprises had sales of $300,000 and a net operating income of $24,000. The average operating assets at Uptown last year amounted to $120,000.
-Last year at Uptown the margin used to calculate ROI amounted to:

Accepted Answer

A) 8% 
B) 12% 
C) 20% 
D) 40%

Question 16

Wait time is considered non-value-added time.

Accepted Answer

A) True 
 B)False

Question 17

Process Time is the only non-value-added component of Throughput Time.

Accepted Answer

A) True 
 B)False

Question 18

Daab Products is a division of a major corporation. The following data are for the most recent year of operations:

-The division's turnover used to compute ROI is closest to:

Accepted Answer

A) 3.84 
B) 0.11 
C) 35.71 
D) 3.47

Question 19

CS Company has a profit margin of 11%. Sales are $320,000, net operating income is $35,200, and average operating assets are $128,000. What is the company's return on investment (ROI)?

Accepted Answer

A) 2.5 
B) 11% 
C) 27.5% 
D) 0.40

Question 20

Throughput Time consists of:

Accepted Answer

A) Process Time. 
B) Inspection Time and Move Time. 
C) Process Time, Inspection Time, and Move Time. 
D) Process Time, Inspection Time, Move Time, and Queue Time.

Exam 6: Performance Measurement in Decentralized Organizations

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 residual income is closest to:

The following data pertain to operations at Quick Incorporated: -The wait time for this operation would be:

A balanced scorecard should not contain any performance measures concerning customer satisfaction since the extent to which customers are satisfied is beyond the control of any manager in the company.

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

Because continuous improvement is very difficult, the emphasis in the balanced scorecard tends to be on meeting preset standards.

Manufacturing Cycle Efficiency (MCE) is computed as:

The following data pertain to operations at Quick Incorporated: -The combined inspection and move time for this operation would be:

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

Fruchter Corporation keeps careful track of the time required to fill orders. The times recorded for a particular order appear below: The throughput time was:

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

Brandon, Inc. has provided the following data for last year's operations: -Brandon's return on investment (ROI) is:

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

The following information relates to the Quilt Division of TDS Corporation for last year: -Assume that Quilt was being evaluated solely on the basis of residual income. Which of the following investment opportunities would Quilt want to invest in?

Last year the Uptown Division of Gorcen Enterprises had sales of $300,000 and a net operating income of $24,000. The average operating assets at Uptown last year amounted to $120,000. -Last year at Uptown the margin used to calculate ROI amounted to:

Wait time is considered non-value-added time.

Process Time is the only non-value-added component of Throughput Time.

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

CS Company has a profit margin of 11%. Sales are $320,000, net operating income is $35,200, and average operating assets are $128,000. What is the company's return on investment (ROI) ?

Throughput Time consists of: