Exam 10: Reporting and Analyzing Liabilities

Dingo Division's operating results include: controllable margin of $150,000, sales totaling $1,200,000, and average operating assets of $500,000.Dingo is considering a project with sales of $100,000, expenses of $86,000, and an investment of average operating assets of $200,000.Dingo's required rate of return is 9%.Should Dingo accept this project?

The comparison of differences between actual and planned results

Bogey Co.recorded operating data for its Cheap division for the year.Bogey requires its return to be 10%. Sales \ 1,400,000 Controllable margin 160,000 Total average assets 4,000,000 Fixed costs 100,000 What is the ROI for the year?

A static budget is appropriate in evaluating a manager's performance if

Controllable margin is most useful for

Which one of the following does not impact the amount of residual income?

Sales results that are evaluated by a static budget might show 1. favorable differences that are not justified. 2. unfavorable differences that are not justified.

The flexible budget

A flexible budget

A flexible budget can be prepared for each of the types of budgets included in the master budget.

Budget reports should be prepared

The Fulmar Division of Jayne Manufacturing had an ROI of 25% when sales were $3 million and controllable margin was $600,000.What were the average operating assets?

What is the primary difference between a static budget and a flexible budget?

A cost center

Total budgeted fixed costs appearing on a flexible budget will be the same amount as total fixed costs on the master budget.

Rhein Manufacturing recorded operating data for its auto accessories division for the year. Sales \ 750,000 Contribution margin 150,000 Total direct fixed costs 90,000 Average total operating assets 400,000 How much is ROI for the year if management is able to identify a way to improve the contribution margin by $30,000, assuming fixed costs are held constant?

A distinguishing characteristic of an investment center is that

Cost centers, profit centers, and investment centers can all be classified as responsibility centers.

Nikoto Steel Co.budgeted manufacturing costs for 50,000 tons of steel are: Fixed manufacturing costs $\quad \$ 50,000$ per month Variable manufacturing costs $\quad \$ 12.00$ per ton of steel Nikoto produced 40,000 tons of steel during March.How much is the flexible budget for total manufacturing costs for March?

Benet Division of United Refinery Company's operating results include: controllable margin, $200,000; sales $2,200,000; and operating assets, $800,000.The Benet Division's ROI is 25%.Management is considering a project with sales of $100,000, variable expenses of $60,000, fixed costs of $40,000; and an asset investment of $150,000.Should management accept this new project?