Question 1

A segment of a business responsible for both revenues and expenses would be called:

Accepted Answer

A)  a cost centre. 
B)  an investment centre. 
C)  a profit centre. 
D)  a motivation centre. 
A)  a cost centre. 
B)  an investment centre. 
C)  a profit centre. 
D)  a motivation centre. C

Question 2

During Cummings most profitable year its net income was $25,000.What is the ROI if the investment was $50,000?

Accepted Answer

A)  28%. 
B)  50%. 
C)  51%. 
D)  63%. 
A)  28%. 
B)  50%. 
C)  51%. 
D)  63%. B

Question 3

In computing the margin in a ROI analysis,which of the following is used in the denominator?

Accepted Answer

A)  Sales. 
B)  Net operating income. 
C)  Average operating assets. 
D)  Residual income. 
A)  Sales. 
B)  Net operating income. 
C)  Average operating assets. 
D)  Residual income. A

Question 4

Mari Inc.'s managers are considering alternative strategies to see if it is possible to improve ROI from that originally budgeted for the coming year.Alternative 1 has more money spent on advertising to increase sales while alternative 2 includes reductions of a number of operating expenses.Adjustments to operating assets are anticipated in each of the two alternatives as well.The numbers as in the original budget and in the two alternatives are set out below:   What is the relative ranking based upon ROI of the above three choices (highest to lowest)?

Accepted Answer

A)  Original Budget,Alternative 1,Alternative 2. 
B)  Alternative 1,Alternative 2,Original Budget. 
C)  Alternative 2,Original Budget,Alternative 1. 
D)  Original Budget,Alternative 2,Alternative 1. 
A)  Original Budget,Alternative 1,Alternative 2. 
B)  Alternative 1,Alternative 2,Original Budget. 
C)  Alternative 2,Original Budget,Alternative 1. 
D)  Original Budget,Alternative 2,Alternative 1.

Question 5

Division B had a ROI last year of 15%.The division's minimum required rate of return is 10%.If the division's average operating assets last year were $450,000,then the division's residual income for last year was?

Accepted Answer

A)  $22,500. 
B)  $37,500. 
C)  $45,000. 
D)  $67,500. 
A)  $22,500. 
B)  $37,500. 
C)  $45,000. 
D)  $67,500.

Question 6

Consider the following three statements: I a profit centre has control over both costs and revenues.
II an investment centre has control over invested funds,but not over costs and revenues.
III a cost centre has no control over sales.
Which statement(s)is/are correct?

Accepted Answer

A)  Only I. 
B)  Only II. 
C)  Only I and III. 
D)  Only I and II. 
A)  Only I. 
B)  Only II. 
C)  Only I and III. 
D)  Only I and II.

Question 7

Assuming that sales and net operating income remain the same,a company's return on investment will:

Accepted Answer

A)  increase if average operating assets increase. 
B)  decrease if average operating assets decrease. 
C)  decrease if turnover decreases. 
D)  decrease if turnover increases. 
A)  increase if average operating assets increase. 
B)  decrease if average operating assets decrease. 
C)  decrease if turnover decreases. 
D)  decrease if turnover increases.

Question 8

The average operating assets for Year 2 were?

Accepted Answer

A)  $1,000,000. 
B)  $1,080,000. 
C)  $1,200,000. 
D)  $1,388,889. 
A)  $1,000,000. 
B)  $1,080,000. 
C)  $1,200,000. 
D)  $1,388,889.

Question 9

The residual income for the Northern Division last year was?

Accepted Answer

A)  $48,000. 
B)  $90,000. 
C)  $125,000. 
D)  $135,000. 
A)  $48,000. 
B)  $90,000. 
C)  $125,000. 
D)  $135,000.

Question 10

Assuming that sales and average operating assets remain the same,a company's return on investment will:

Accepted Answer

A)  increase if net operating income increases. 
B)  decrease if net operating income decreases. 
C)  increase if margin decreases. 
D)  decrease if margin increases. 
A)  increase if net operating income increases. 
B)  decrease if net operating income decreases. 
C)  increase if margin decreases. 
D)  decrease if margin increases.

Question 11

Largo Company recorded for the past year,sales of $750,000 and had average operating assets of $375,000.What is the margin that Largo Company needed to earn in order to achieve an ROI of 15%?

Accepted Answer

A)  2.00%. 
B)  7.50%. 
C)  9.99%. 
D)  15.00%. 
A)  2.00%. 
B)  7.50%. 
C)  9.99%. 
D)  15.00%.

Question 12

Suppose a manager's performance is to be measured by residual income.Which of the following will not result in an increase in the residual income figure for this manager,assuming other factors remain constant?

Accepted Answer

A)  An increase in sales. 
B)  An increase in the minimum required rate of return. 
C)  A decrease in expenses. 
D)  A decrease in operating assets. 
A)  An increase in sales. 
B)  An increase in the minimum required rate of return. 
C)  A decrease in expenses. 
D)  A decrease in operating assets.

Question 13

The Northern Division of the Smith Company had average operating assets totalling $150,000 last year.If the minimum required rate of return is 12% and if last year's net operating income at Northern was $20,000,then the residual income for Northern last year was?

Accepted Answer

A)  $2,000. 
B)  $5,000. 
C)  $18,000. 
D)  $20,000. 
A)  $2,000. 
B)  $5,000. 
C)  $18,000. 
D)  $20,000.

Question 14

Jimbob Co.has three operating segments which are accounted for as profit centres with the following information for the most recent fiscal year.

Accepted Answer

@#IMG-DLM& 
Required:
Prepare a Profit C

Question 15

The following data have been extracted from the year-end reports of two companies-Company X and Company Y:

Accepted Answer

@#IMG-DLM& 
Required:
Fill in

Question 16

The margin in Year 2 was?

Accepted Answer

A)  12.00%. 
B)  18.75%. 
C)  22.50%. 
D)  27.00%. 
A)  12.00%. 
B)  18.75%. 
C)  22.50%. 
D)  27.00%.

Question 17

Sales and average operating assets for Company P and Company Q are given below:   What is the margin that each company will have to earn in order to generate a return on investment of 20%?

Accepted Answer

A)  2.5% and 5%. 
B)  8% and 4%. 
C)  12% and 16%. 
D)  50% and 100%. 
A)  2.5% and 5%. 
B)  8% and 4%. 
C)  12% and 16%. 
D)  50% and 100%.

Question 18

All other things being equal,a company's return on investment (ROI)would generally increase when:

Accepted Answer

A)  average operating assets increase. 
B)  sales decrease. 
C)  operating expenses decrease. 
D)  operating expenses increase. 
A)  average operating assets increase. 
B)  sales decrease. 
C)  operating expenses decrease. 
D)  operating expenses increase.

Question 19

Which of the following is not an operating asset?

Accepted Answer

A)  cash. 
B)  inventory. 
C)  plant equipment. 
D)  investment in another company. 
A)  cash. 
B)  inventory. 
C)  plant equipment. 
D)  investment in another company.

Question 20

A company's return on investment is the:

Accepted Answer

A)  margin divided by turnover. 
B)  margin multiplied by turnover. 
C)  turnover divided by average operating assets. 
D)  turnover multiplied by average operating assets. 
A)  margin divided by turnover. 
B)  margin multiplied by turnover. 
C)  turnover divided by average operating assets. 
D)  turnover multiplied by average operating assets.

A segment of a business responsible for both revenues and expenses would be called:

During Cummings most profitable year its net income was $25,000.What is the ROI if the investment was $50,000?

In computing the margin in a ROI analysis,which of the following is used in the denominator?

Division B had a ROI last year of 15%.The division's minimum required rate of return is 10%.If the division's average operating assets last year were $450,000,then the division's residual income for last year was?

Consider the following three statements: I a profit centre has control over both costs and revenues. II an investment centre has control over invested funds,but not over costs and revenues. III a cost centre has no control over sales. Which statement(s)is/are correct?

Assuming that sales and net operating income remain the same,a company's return on investment will:

The average operating assets for Year 2 were?

The residual income for the Northern Division last year was?

Assuming that sales and average operating assets remain the same,a company's return on investment will:

Largo Company recorded for the past year,sales of $750,000 and had average operating assets of $375,000.What is the margin that Largo Company needed to earn in order to achieve an ROI of 15%?

Suppose a manager's performance is to be measured by residual income.Which of the following will not result in an increase in the residual income figure for this manager,assuming other factors remain constant?

The Northern Division of the Smith Company had average operating assets totalling $150,000 last year.If the minimum required rate of return is 12% and if last year's net operating income at Northern was $20,000,then the residual income for Northern last year was?

Jimbob Co.has three operating segments which are accounted for as profit centres with the following information for the most recent fiscal year.

The following data have been extracted from the year-end reports of two companies-Company X and Company Y:

The margin in Year 2 was?

Sales and average operating assets for Company P and Company Q are given below: What is the margin that each company will have to earn in order to generate a return on investment of 20%?

All other things being equal,a company's return on investment (ROI)would generally increase when:

Which of the following is not an operating asset?

A company's return on investment is the:

An Introduction to Managerial Accounting and Cost Concepts

Systems Design: Job-Order Costing

Systems Design: Activity-Based Costing

Systems Design: Process Costing

Cost Behavior: Analysis and Use

Cost-Volume-Profit Relationships

Profit Planning

Standard Costs

Flexible Budgets and Overhead Analysis

Decentralization

Relevant Costs for Decision Making

How Well Am I Doing Statement of Cash Flows

How Well Am I Doing Financial Statement Analysis

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Exam 12: Capital Budgeting Decisions

A segment of a business responsible for both revenues and expenses would be called:

During Cummings most profitable year its net income was $25,000.What is the ROI if the investment was $50,000?

In computing the margin in a ROI analysis,which of the following is used in the denominator?

Division B had a ROI last year of 15%.The division's minimum required rate of return is 10%.If the division's average operating assets last year were $450,000,then the division's residual income for last year was?

Consider the following three statements: I a profit centre has control over both costs and revenues. II an investment centre has control over invested funds,but not over costs and revenues. III a cost centre has no control over sales. Which statement(s)is/are correct?

Assuming that sales and net operating income remain the same,a company's return on investment will:

The average operating assets for Year 2 were?

The residual income for the Northern Division last year was?

Assuming that sales and average operating assets remain the same,a company's return on investment will:

Largo Company recorded for the past year,sales of $750,000 and had average operating assets of $375,000.What is the margin that Largo Company needed to earn in order to achieve an ROI of 15%?

Suppose a manager's performance is to be measured by residual income.Which of the following will not result in an increase in the residual income figure for this manager,assuming other factors remain constant?

The Northern Division of the Smith Company had average operating assets totalling $150,000 last year.If the minimum required rate of return is 12% and if last year's net operating income at Northern was $20,000,then the residual income for Northern last year was?

Jimbob Co.has three operating segments which are accounted for as profit centres with the following information for the most recent fiscal year.

The following data have been extracted from the year-end reports of two companies-Company X and Company Y:

The margin in Year 2 was?

Sales and average operating assets for Company P and Company Q are given below: What is the margin that each company will have to earn in order to generate a return on investment of 20%?

All other things being equal,a company's return on investment (ROI)would generally increase when:

Which of the following is not an operating asset?

A company's return on investment is the:

An Introduction to Managerial Accounting and Cost Concepts

Systems Design: Job-Order Costing

Systems Design: Activity-Based Costing

Systems Design: Process Costing

Cost Behavior: Analysis and Use

Cost-Volume-Profit Relationships

Profit Planning

Standard Costs

Flexible Budgets and Overhead Analysis

Decentralization

Relevant Costs for Decision Making

How Well Am I Doing Statement of Cash Flows

How Well Am I Doing Financial Statement Analysis

Filters