Question 1

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

Accepted Answer

A) They may have low ability. 
B) They may not prefer to work hard. 
C) They may prefer to spend company resources on perquisites. 
D) All of these are reasons. 
A) They may have low ability. 
B) They may not prefer to work hard. 
C) They may prefer to spend company resources on perquisites. 
D) All of these are reasons.

Question 2

The Chasis Division provides frames for the Tractor Division of a company. The standard unit costs for the Chasis Division are as follows: $\begin{array} { l  }
 \text {Direct materials }&\$800\
 \text { Direct labor}&1,500\
 \text {Variable overhead }&40\
 \text {Fixed overhead }&350\
 \text { Market price per unit}&4,575\
\end{array}$
 What is the transfer price based on full cost plus a markup of 20 percent?

Accepted Answer

A) $5,490 
B) $4,575 
C) $3,240 
D) $3,660 
A) $5,490 
B) $4,575 
C) $3,240 
D) $3,660

Question 3

In a multinational firm, it is important to separate the evaluation of a division manager from the __________.

Accepted Answer

The answer of In a multinational firm, it is important...

Question 4

The right to buy a certain number of shares of a company's stock at a particular price is(are) called:

Accepted Answer

A) Perquisites 
B) Cash compensation 
C) Stock-based compensation 
D) Stock options 
A) Perquisites 
B) Cash compensation 
C) Stock-based compensation 
D) Stock options

Question 5

Lambda Division had the following information: $\begin{array}{lr}
\text { Asset base in Lambda Division } & \$ 400,000 \
\text { Met income in Lambda Division } & \$ 5,000 \
\text { Weighted average cost of capital } & 12 \% \
\text { Target ROI } & 15 \% \
\text { Margin for Lambda Division } & 20 \%
\end{array}$ What is the residual income for Lambda Division?

Accepted Answer

A) $(10,000) 
B) $48,000 
C) $7,500 
D) $60,000 
A) $(10,000) 
B) $48,000 
C) $7,500 
D) $60,000

Question 6

A manager of a profit center does not control:

Accepted Answer

A) Revenues 
B) Costs 
C) Profits 
D) Investments 
A) Revenues 
B) Costs 
C) Profits 
D) Investments

Question 7

Transfer pricing exists when one division of a company produces a product that can be used in the production by a different division.

Accepted Answer

A) True 
 B)False

Question 8

The transfer price that would leave a buying division no worse off if an input is purchased from an internal division is called _____.

Accepted Answer

A) margin 
B) floor 
C) ceiling 
D) markup 
A) margin 
B) floor 
C) ceiling 
D) markup

Question 9

The following information pertains to the three divisions of Merrymount Company: $\begin{array}{lrrr}&\text { Division } X& \text { Division } Y& \text { Division } Z\
\text { Sales } & ? & ? & 1,250,000 \
\text { Net operating income } & \$ 36,000 & \$ 25,000 & \$ 7,000 \
\text { Average operating assets } & 300,000 & ? & ? \
\text { Retum on investment } & ? & 20 \% & 15 \% \
\text { Margin } & 0.10 & 0.05 & ? \
\text { Turnover } & 1.5 & ? & ? \
\text { Target ROI } & 15 \% & 12 \% & 10 \%
\end{array}$ What is the residual income for Division X?

Accepted Answer

A) $36,000 
B) $45,000 
C) $(9,000) 
D) $(36,000) 
A) $36,000 
B) $45,000 
C) $(9,000) 
D) $(36,000)

Question 10

The delegation of decision-making authority to successively lower management levels in an organization is called:

Accepted Answer

A) Centralization 
B) Decentralization 
C) Optimization 
D) An unfavorable overhead variance 
A) Centralization 
B) Decentralization 
C) Optimization 
D) An unfavorable overhead variance

Question 11

The Marketing Department of a factory is an example of a _____.

Accepted Answer

A) profit center 
B) revenue center 
C) cost center 
D) investment center 
A) profit center 
B) revenue center 
C) cost center 
D) investment center

Question 12

An example of an investment center is a

Accepted Answer

A) production department. 
B) company. 
C) marketing department. 
D) credit department. 
A) production department. 
B) company. 
C) marketing department. 
D) credit department.

Question 13

The following information pertains to the three divisions of Merrymount Company: $\begin{array}{lrrr}&\text { Division } X& \text { Division } Y& \text { Division } Z\
\text { Sales } & ? & ? & 1,250,000 \
\text { Net operating income } & \$ 36,000 & \$ 25,000 & \$ 7,000 \
\text { Average operating assets } & 300,000 & ? & ? \
\text { Retum on investment } & ? & 20 \% & 15 \% \
\text { Margin } & 0.10 & 0.05 & ? \
\text { Turnover } & 1.5 & ? & ? \
\text { Target ROI } & 15 \% & 12 \% & 10 \%
\end{array}$ What is the margin for Division Z?

Accepted Answer

A) 1.5% 
B) 100.0% 
C) 6.0% 
D) 15.0% 
A) 1.5% 
B) 100.0% 
C) 6.0% 
D) 15.0%

Question 14

The emphasis on short-run results at the expense of the long run is

Accepted Answer

A) efficient behavior. 
B) effective behavior. 
C) optimal behavior. 
D) myopic behavior. 
A) efficient behavior. 
B) effective behavior. 
C) optimal behavior. 
D) myopic behavior.

Question 15

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

Accepted Answer

A) 50 percent. 
B) 25 percent. 
C) 100 percent. 
D) 125 percent. 
A) 50 percent. 
B) 25 percent. 
C) 100 percent. 
D) 125 percent.

Question 16

The minimum transfer price is the absolute maximum price that can be accepted.

Accepted Answer

A) True 
 B)False

Question 17

__________ limitations make it difficult for any central manager to know everything about all products and markets.

Accepted Answer

The answer of __________ limitations make it difficult for any...

Question 18

Provide the missing data in the table. (Round the answer to two decimal places.) $$\begin{array} { l r r r } 
& \text { Northern } & \text { Southern } & \text { Central } \
& \text { Division } & \text { Division } & \text { Division } \\hline
\text { Sales } & \$ ( \mathrm { a } ) & \$ 420,000 & \$ ( \mathrm {~g} ) \
\text { Operating assets } & \$ ( \mathrm {~b} ) & \$ ( \mathrm {~d} ) & \$ 750,000 \
\text { Net operating income } & \$ 850,000 & \$ 18,000 & \$ 270,000 \
\text { Margin } & 0.16 & ( \mathrm { e } ) & 0.18 \
\text { Turnover } & ( \mathrm { c } ) & ( \mathrm { f } ) & 2.00 \
\text { Return on investment } & 20 \% & 15 \% & ( \mathrm {~h} )
\end{array}$$

Accepted Answer

The answer of Provide the missing data in the table....

Question 19

It is important for the multinational firm to separate the evaluation of a division manager from the division.

Accepted Answer

A) True 
 B)False

Question 20

Goal congruence means that the goals of managers are aligned with the goals of the company.

Accepted Answer

A) True 
 B)False

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

In a multinational firm, it is important to separate the evaluation of a division manager from the __________.

The right to buy a certain number of shares of a company's stock at a particular price is(are) called:

Lambda Division had the following information: Asset base in Lambda Division \ 400,000 Met income in Lambda Division \ 5,000 Weighted average cost of capital 12\% Target ROI 15\% Margin for Lambda Division 20\% What is the residual income for Lambda Division?

A manager of a profit center does not control:

Transfer pricing exists when one division of a company produces a product that can be used in the production by a different division.

The transfer price that would leave a buying division no worse off if an input is purchased from an internal division is called _____.

The delegation of decision-making authority to successively lower management levels in an organization is called:

The Marketing Department of a factory is an example of a _____.

An example of an investment center is a

The emphasis on short-run results at the expense of the long run is

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

The minimum transfer price is the absolute maximum price that can be accepted.

__________ limitations make it difficult for any central manager to know everything about all products and markets.

It is important for the multinational firm to separate the evaluation of a division manager from the division.

Goal congruence means that the goals of managers are aligned with the goals of the company.

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters

Exam 10: Decentralization: Responsibility Accounting, Performance

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

In a multinational firm, it is important to separate the evaluation of a division manager from the __________.

The right to buy a certain number of shares of a company's stock at a particular price is(are) called:

Lambda Division had the following information: Asset base in Lambda Division \ 400,000 Met income in Lambda Division \ 5,000 Weighted average cost of capital 12\% Target ROI 15\% Margin for Lambda Division 20\% What is the residual income for Lambda Division?

A manager of a profit center does not control:

Transfer pricing exists when one division of a company produces a product that can be used in the production by a different division.

The transfer price that would leave a buying division no worse off if an input is purchased from an internal division is called _____.

The delegation of decision-making authority to successively lower management levels in an organization is called:

The Marketing Department of a factory is an example of a _____.

An example of an investment center is a

The emphasis on short-run results at the expense of the long run is

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

The minimum transfer price is the absolute maximum price that can be accepted.

__________ limitations make it difficult for any central manager to know everything about all products and markets.

It is important for the multinational firm to separate the evaluation of a division manager from the division.

Goal congruence means that the goals of managers are aligned with the goals of the company.

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters