Exam 23: Evaluating Decentralized Operations

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If divisional income from operations is $100,000,invested assets are $850,000,and the minimum rate of return on invested assets is 8%,the residual income is $68,000.

(True/False)

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Question 21

A decentralized business organization is one in which all major planning and operating decisions are made by top management.

(True/False)

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Question 22

The ratio of sales to investment is termed the rate of return on investment.

(True/False)

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Question 23

The best measure of managerial efficiency in the use of investments in assets is

(Multiple Choice)

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Question 24

If Division Q's yearly income from operations was $30,000 on invested assets of $200,000,the rate of return on investment is 15%.

(True/False)

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Question 25

If income from operations for a division is $6,000,invested assets are $25,000,and sales are $30,000,the investment turnover is 5.

(True/False)

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Question 26

Which of the following is not one of the common types of responsibility centers?

(Multiple Choice)

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Question 27

The profit center income statement should include only revenues and expenses that are controlled by the manager.

(True/False)

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Question 28

Which of the following is a measure of a cost center manager's performance?

(Multiple Choice)

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Question 29

What is Clydesdale Company's rate of return on investment?

(Multiple Choice)

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Question 30

What will the income of the Macro Division be after all service department allocations?

(Multiple Choice)

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Question 31

Three measures of investment center performance are income from operations,rate of return on investment,and residual income.

(True/False)

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Question 32

If the profit margin for a division is 11% and the investment turnover is 1.5,the rate of return on investment is 7.3%.

(True/False)

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Question 33

What additional information is needed to calculate the rate of return on investment if income from operations is known?

(Multiple Choice)

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Question 34

If income from operations for a division is $120,000,sales are $975,000,and invested assets are $750,000,the investment turnover is 1.3.

(True/False)

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Question 35

A disadvantage to using the residual income performance measure is that it encourages managers to spend only the minimum acceptable rate of return on assets set by upper management.

(True/False)

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Question 36

Income from operations for Division L is $250,000,total service department charges are $400,000 and operating expenses are $2,750,000.What are the revenues for Division L?

(Multiple Choice)

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Question 37

Office salaries expense for a department store is an indirect expense.

(True/False)

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Question 38

The three common types of responsibility centers are referred to as cost centers,profit centers,and investment centers.

(True/False)

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Question 39

Assume that divisional income from operations amounts to $215,000 and top management has established 15% as the minimum rate of return on divisional assets totaling $1,000,000.The residual income for the division is

(Multiple Choice)

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Question 40

Showing 21 - 40 of 175

Exam 23: Evaluating Decentralized Operations

If divisional income from operations is $100,000,invested assets are $850,000,and the minimum rate of return on invested assets is 8%,the residual income is $68,000.

A decentralized business organization is one in which all major planning and operating decisions are made by top management.

The ratio of sales to investment is termed the rate of return on investment.

The best measure of managerial efficiency in the use of investments in assets is

If Division Q's yearly income from operations was $30,000 on invested assets of $200,000,the rate of return on investment is 15%.

If income from operations for a division is $6,000,invested assets are $25,000,and sales are $30,000,the investment turnover is 5.

Which of the following is not one of the common types of responsibility centers?

The profit center income statement should include only revenues and expenses that are controlled by the manager.

Which of the following is a measure of a cost center manager's performance?

What is Clydesdale Company's rate of return on investment?

What will the income of the Macro Division be after all service department allocations?

Three measures of investment center performance are income from operations,rate of return on investment,and residual income.

If the profit margin for a division is 11% and the investment turnover is 1.5,the rate of return on investment is 7.3%.

What additional information is needed to calculate the rate of return on investment if income from operations is known?

If income from operations for a division is $120,000,sales are $975,000,and invested assets are $750,000,the investment turnover is 1.3.

A disadvantage to using the residual income performance measure is that it encourages managers to spend only the minimum acceptable rate of return on assets set by upper management.

Income from operations for Division L is $250,000,total service department charges are $400,000 and operating expenses are $2,750,000.What are the revenues for Division L?

Office salaries expense for a department store is an indirect expense.

The three common types of responsibility centers are referred to as cost centers,profit centers,and investment centers.

Assume that divisional income from operations amounts to $215,000 and top management has established 15% as the minimum rate of return on divisional assets totaling $1,000,000.The residual income for the division is

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Current,installment Notes,and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, stock Transactions, and Dividends

Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity-Based Costing

Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Evaluating Variances From Standard Costs

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

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