Question 1

The four perspectives of the balanced scorecard include all of the following except

Accepted Answer

A) financial. 
B) customer. 
C) cost. 
D) learning and growth. 
A) financial. 
B) customer. 
C) cost. 
D) learning and growth.

Question 2

Management by exception saves management time because managers in revenue centers only focus on unfavorable variances.

Accepted Answer

A) True 
 B)False

Question 3

Return on Investment (ROI)is defined as operating income divided by current assets.

Accepted Answer

A) True 
 B)False

Question 4

A favorable variances causes operating income to be higher than budgeted.

Accepted Answer

A) True 
 B)False

Question 5

A profit center is the responsibility center that is only responsible for costs.

Accepted Answer

A) True 
 B)False

Question 6

Companies that decentralize split their operations into different operating segments.

Accepted Answer

A) True 
 B)False

Question 7

The price charged for the internal sale of a product between two different divisions of the same company is known as the ________________

Accepted Answer

A) transfer price. 
B) sales price. 
C) transfer cost. 
D) margin price. 
A) transfer price. 
B) sales price. 
C) transfer cost. 
D) margin price.

Question 8

If a company must decrease its sales price of a product while all of the company's expenses remain constant, what will happen to return on investment (ROI)?

Accepted Answer

A) ROI will decrease. 
B) ROI will increase. 
C) ROI will not be affected. 
D) We cannot determine the effect from the information provided. 
A) ROI will decrease. 
B) ROI will increase. 
C) ROI will not be affected. 
D) We cannot determine the effect from the information provided.

Question 9

Selected financial data for The Portland Porcelain Works Coffee Mug Division is as follows:   What is The Portland Porcelain Works Coffee Mug Division capital turnover?

Accepted Answer

A) 5)0 
B) 10.6 
C) 3)8 
D) 1)3 
A) 5)0 
B) 10.6 
C) 3)8 
D) 1)3

Question 10

The difference between actual results and budget results is known as decentralization.

Accepted Answer

A) True 
 B)False

Question 11

Decentralization may duplicate a company's costs because each business unit can contain its own purchasing department.

Accepted Answer

A) True 
 B)False

Question 12

An example of management by exception occurs when a manager investigates a large variance in a performance report to assign responsibility.

Accepted Answer

A) True 
 B)False

Question 13

Another name for a static budget is a flexible budget.

Accepted Answer

A) True 
 B)False

Question 14

All of the following are potential advantages of decentralization except

Accepted Answer

A) Frees top management's time 
B) Encourages use of expert knowledge 
C) Potential duplication of costs 
D) Provides training 
A) Frees top management's time 
B) Encourages use of expert knowledge 
C) Potential duplication of costs 
D) Provides training

Question 15

The Pasta Division of Whole Grain Corporation had sales of $7,000,000 and operating income of $1,190,000 last year. The total assets of the Pasta Division were $2,000,000, while current liabilities were $300,000. Whole Grain Corporation's target rate of return is 13%, while its weighted average cost of capital is 8%. The effective tax rate for the company is 40%. What is the Pasta Division's capital turnover?

Accepted Answer

A) 5)9 
B) 6)7 
C) 23.3 
D) 3)5 
A) 5)9 
B) 6)7 
C) 23.3 
D) 3)5

Question 16

Golden Corporation has operating income of $315,000, a sales margin of 12%, and capital turnover of 3.0. The return on investment (ROI)for Golden Corporation may be closest to

Accepted Answer

A) 4%. 
B) 36%. 
C) 25%. 
D) 120%. 
A) 4%. 
B) 36%. 
C) 25%. 
D) 120%.

Question 17

The Top Hat Division of Blandon's Fine Menswear had the following results last year (in thousands).   Management's target rate of return is 24% and the weighted average cost of capital is 18%.
What is the Top Hat Division's Return on Investment (ROI)?

Accepted Answer

A) 17.00% 
B) 10.00% 
C) 170.00% 
D) 5)10% 
A) 17.00% 
B) 10.00% 
C) 170.00% 
D) 5)10%

Question 18

Potential duplication of costs is a disadvantage of decentralized organizations.

Accepted Answer

A) True 
 B)False

Question 19

A favorable variance causes operating income to be _______________ the budgeted operating income?

Accepted Answer

A) lower than 
B) equal to 
C) greater than 
D) half as much as 
A) lower than 
B) equal to 
C) greater than 
D) half as much as

Question 20

A flexible budget is a budget prepared for multiple volume levels.

Accepted Answer

A) True 
 B)False

The four perspectives of the balanced scorecard include all of the following except

Management by exception saves management time because managers in revenue centers only focus on unfavorable variances.

Return on Investment (ROI)is defined as operating income divided by current assets.

A favorable variances causes operating income to be higher than budgeted.

A profit center is the responsibility center that is only responsible for costs.

Companies that decentralize split their operations into different operating segments.

The price charged for the internal sale of a product between two different divisions of the same company is known as the ________________

If a company must decrease its sales price of a product while all of the company's expenses remain constant, what will happen to return on investment (ROI)?

Selected financial data for The Portland Porcelain Works Coffee Mug Division is as follows: What is The Portland Porcelain Works Coffee Mug Division capital turnover?

The difference between actual results and budget results is known as decentralization.

Decentralization may duplicate a company's costs because each business unit can contain its own purchasing department.

An example of management by exception occurs when a manager investigates a large variance in a performance report to assign responsibility.

Another name for a static budget is a flexible budget.

All of the following are potential advantages of decentralization except

Golden Corporation has operating income of $315,000, a sales margin of 12%, and capital turnover of 3.0. The return on investment (ROI)for Golden Corporation may be closest to

The Top Hat Division of Blandon's Fine Menswear had the following results last year (in thousands). Management's target rate of return is 24% and the weighted average cost of capital is 18%. What is the Top Hat Division's Return on Investment (ROI)?

Potential duplication of costs is a disadvantage of decentralized organizations.

A favorable variance causes operating income to be _______________ the budgeted operating income?

A flexible budget is a budget prepared for multiple volume levels.

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, Lean Operations, and the Costs of Quality

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters

Exam 10: Performance Evalulation

The four perspectives of the balanced scorecard include all of the following except

Management by exception saves management time because managers in revenue centers only focus on unfavorable variances.

Return on Investment (ROI)is defined as operating income divided by current assets.

A favorable variances causes operating income to be higher than budgeted.

A profit center is the responsibility center that is only responsible for costs.

Companies that decentralize split their operations into different operating segments.

The price charged for the internal sale of a product between two different divisions of the same company is known as the ________________

If a company must decrease its sales price of a product while all of the company's expenses remain constant, what will happen to return on investment (ROI)?

Selected financial data for The Portland Porcelain Works Coffee Mug Division is as follows: What is The Portland Porcelain Works Coffee Mug Division capital turnover?

The difference between actual results and budget results is known as decentralization.

Decentralization may duplicate a company's costs because each business unit can contain its own purchasing department.

An example of management by exception occurs when a manager investigates a large variance in a performance report to assign responsibility.

Another name for a static budget is a flexible budget.

All of the following are potential advantages of decentralization except

Golden Corporation has operating income of $315,000, a sales margin of 12%, and capital turnover of 3.0. The return on investment (ROI)for Golden Corporation may be closest to

The Top Hat Division of Blandon's Fine Menswear had the following results last year (in thousands). Management's target rate of return is 24% and the weighted average cost of capital is 18%. What is the Top Hat Division's Return on Investment (ROI)?

Potential duplication of costs is a disadvantage of decentralized organizations.

A favorable variance causes operating income to be _______________ the budgeted operating income?

A flexible budget is a budget prepared for multiple volume levels.

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, Lean Operations, and the Costs of Quality

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters