Given below is an excerpt from a management performance report: $\begin{array}{llll}&\text { Budget }&\text {Actual }&\text {Difference }\\ \text { Contribution margin } & \$ 600,000 & \$ 580,000 & \$ 20,000 \mathrm{U} \\ \text { Controllable fixed costs } & \$ 200,000 & \$ 220,000 & \$ 20,000 \mathrm{U} \end{array}$ The manager's overall performance

A) is 10% above expectations. B) is 10% below expectations. C) is equal to expectations. D) cannot be determined from the information provided. A) is 10% above expectations. B) is 10% below expectations. C) is equal to expectations. D) cannot be determined from the information provided.

A company's planned activity level for next year is expected to be 100000 machine hours. At this level of activity the company budgeted the following manufacturing overhead costs: $\begin{array}{lrlr}\text { Variable }&&\text { Fixed }\\ \hline \text { Indirect materials } & \$ 140,000 & \text { Depreciation } & \$ 60,000 \\ \text { Indirect labor } & 200,000 & \text { Taxes } & 10,000 \\ \text { Factory supplies } & 20,000 & \text { Supervision } & 50,000 \end{array}$ A flexible budget prepared at the 90000 machine hours level of activity would show total manufacturing overhead costs of

A) $270000. B) $360000. C) $370000. D) $300000. A) $270000. B) $360000. C) $370000. D) $300000.

A) a responsibility center that always reports a profit. B) a responsibility center that incurs costs and generates revenues. C) evaluated by the rate of return earned on the investment allocated to the center. D) referred to as a loss center when operations do not meet the company's objectives. A) a responsibility center that always reports a profit. B) a responsibility center that incurs costs and generates revenues. C) evaluated by the rate of return earned on the investment allocated to the center. D) referred to as a loss center when operations do not meet the company's objectives.

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

A) 4% B) 35% C) 6% D) 1.5% A) 4% B) 35% C) 6% D) 1.5%

A company's planned activity level for next year is expected to be 100000 machine hours. At this level of activity the company budgeted the following manufacturing overhead costs: $\begin{array}{lrlr}\text { Variable }&&\text { Fixed }\\ \hline \text { Indirect materials } & \$ 140,000 & \text { Depreciation } & \$ 60,000 \\ \text { Indirect labor } & 200,000 & \text { Taxes } & 10,000 \\ \text { Factory supplies } & 20,000 & \text { Supervision } & 50,000 \end{array}$ A flexible budget prepared at the 80000 machine hours level of activity would show total manufacturing overhead costs of

A) $288000. B) $360000. C) $384000. D) $408000. A) $288000. B) $360000. C) $384000. D) $408000.

Berne Inc. uses a flexible budget for manufacturing overhead based on machine hours. Variable manufacturing overhead costs per machine hour are as follows: $\begin{array}{lr} \text { Indirect labor } & \$ 5.00 \\ \text { Indirect materials } & 2.50 \\ \text { Maintenance } & .80 \\ \text { Utilities } & .30\\ \text { Fixed overhead costs per month are: }\\ \text { Supervision } & \$ 800 \\ \text { Insurance } & 200 \\ \text { Property taxes } & 300 \\ \text { Depreciation } & 900 \end{array}$ The company believes it will normally operate in a range of 2000 to 4000 machine hours per month. Instructions Prepare a flexible manufacturing overhead budget for the expected range of activity using increments of 1000 machine hours.

The answer of Berne Inc. uses a flexible budget for...

The area manager of the Red White and Brew Restaurants is considering two possible expansion alternatives. The required investments expected controllable margins and the ROIs of each are as follows: \[\begin{array} { l c c c } \text { Project } & \text { Investment } & \text { Controllable Margin } & \text { ROl }\\ \text { Phoenix } & \$ 120,000 & \$ 30,000 & 25 \% \\ \text { Chicago } & \$ 540,000 & \$ 50,000 & 9.25 \% \end{array}\] The Red White and Brew segment has currently $2000000 in invested capital and a controllable margin of $250000. Which one of following projects will increase the Red White and Brew division's ROI?

A) Both the Phoenix and Chicago options B) Only the Phoenix option C) Only the Chicago option D) Neither the Phoenix nor the Chicago options A) Both the Phoenix and Chicago options B) Only the Phoenix option C) Only the Chicago option D) Neither the Phoenix nor the Chicago options