Exam 10: Performance Evalulation

In a(n)________ center, managers are accountable to both revenues and costs.

Percy Corporation sells a unit of its product for $12.00, resulting in a contribution margin of $7.00 per unit. Fixed costs are budgeted at $50,000 per quarter for volumes up to 12,000 units and $80,000 for volumes exceeding 12,000 units. Prepare the flexible budget for the next quarter for volume levels of 11,000, 13,000, and 16,000 units.

With ________, managers look at the size of the variances between actual results and budgeted amounts to determine which variances a manager should investigate.

Return on investment and revenue growth may be examples of

The ________reveals whether or not additional sales revenue can offset an increase in costs in the flexible budget performance report.

Capital turnover is defined as operating income divided by total assets.

Pendant Publishing reported the following results for its Textbook Division: Pendant's target rate of return is 11% and the weighted average cost of capital is 6%. Its effective tax rate is 45%. What is the Textbook Division's sales margin?

The following data relates to Logan Electric and its Light Bulb Division. What is the Light Bulb Division's Return on Investment (ROI)?

Selected financial data for the Photocopies Division of Elizabeth's Business Machines is as follows: What is the Photocopier Division's return on investment?

Pendant Publishing reported the following results for its Textbook Division: Pendant's target rate of return is 24% and the weighted average cost of capital is 14%. Its effective tax rate is 25%. What is the Textbook Division's Return on Investment (ROI)?

Which of the following statements is NOT true?

Fern Company has a target rate of return of 19%, an ROI of 31%, and capital turnover of 2.9. The sales margin for Fern Company may be closest to

Pigeon Forges' stakeholders require a 7% rate of return. The company currently has an ROI of 59.4% and a capital turnover of 3.6 What is Pigeon's sales margin?

The duties of an investment center manager are similar to those of a CEO.

The Southern Division of Amelia Corporation had sales of $61,000,000 and operating income of $200,000 last year. The total assets of the Southern Division were $2,000,000, while current liabilities were $500,000. Amelia Corporation's target rate of return is 6%, while its weighted average cost of capital is 5%. The effective tax rate for the company is 35%. What is the Southern Division's Return on Investment (ROI)?

The Box Manufacturing Division of the Allied Paper Company reported the following results from the past year. Shareholders require a return of 9%. Management calculated a weighted-average cost of capital (WACC)of 8%. Allied's corporate tax rate is 35%. What is the division's sales margin?

The performance evaluation of a profit center is typically based on its

A manager is only accountable for expenses in a(n)________ center.

Customer satisfaction, operational efficiency, employee excellence, and financial profitability are often measured as critical factors in the balanced scorecard approach.

The ________ approach recognizes that both financial and operational performance measures should be considered when evaluating company performance.