Question 1

Economic Value Added is residual income with the cost of capital equal to the firm's

Accepted Answer

A)  budgeted cost of capital. 
B)  average cost of capital. 
C)  standard cost of capital. 
D)  actual cost of capital. 
A)  budgeted cost of capital. 
B)  average cost of capital. 
C)  standard cost of capital. 
D)  actual cost of capital.

Question 2

Quinn Inc.has a number of divisions.One division, Style, makes zippers that are used in the manufacture of boots.Another division, LeatherStuff, makes boots that use the zippers and needs 90,000 zippers per year.Style incurs the following costs for one zipper:
 
 Quinn has capacity to make 950,000 zippers per year, but due to a soft market, only plans to produce and sell 620,000 zippers next year.LeatherStuff currently buys zippers from an outside supplier for $3.50 each (the same price that Style receives)
-Assume that Style and LeatherStuff have agreed on a transfer price of $3.25.What are the total cost savings for LeatherStuff?

Accepted Answer

A)  $22,500 
B)  $315,000 
C)  $292,500 
D)  $69,000 
E)  $81,000 
A)  $22,500 
B)  $315,000 
C)  $292,500 
D)  $69,000 
E)  $81,000

Question 3

Elite Inc.has many divisions that are evaluated on the basis of return on investment (ROI).One division, Beta, makes boxes.A second division, Lambda, makes chocolates and needs 90,000 boxes per year.Beta incurs the following costs for one box:
 
 Beta has the capacity to make 720,000 boxes per year.Lambda currently buys its boxes from an outside supplier for $2.00 each (the same price that Beta receives). 
-Assume that Elite Inc.mandates that any transfers take place at full manufacturing cost. What would be the transfer price if Beta transferred boxes to Lambda?

Accepted Answer

A)  $1.35 
B)  $1.76 
C)  $1.00 
D)  The transfer price cannot be determined from the information given. 
E)  $0.90 
A)  $1.35 
B)  $1.76 
C)  $1.00 
D)  The transfer price cannot be determined from the information given. 
E)  $0.90

Question 4

Which of the following is an absolute dollar measure rather than a percentage?

Accepted Answer

A)  average operating assets. 
B)  operating income. 
C)  residual income. 
D)  economic value added (EV
A) . 
E)  All of these. 
A)  average operating assets. 
B)  operating income. 
C)  residual income. 
D)  economic value added (EV
A) . 
E)  All of these.

Question 5

Select the term from below to match with the correct statement.
-A(n) ___________ is a responsibility center in which a manager is responsible only for sales, or revenues.

Accepted Answer

A) centralization 
B) revenue center 
C) profit center 
D) cost center 
E) investment center
F)decentralization 
A) centralization 
B) revenue center 
C) profit center 
D) cost center 
E) investment center
F)decentralization

Question 6

Last week, Davis worked for 50 hours and produced 250 business card boxes.
- What is the velocity in business card boxes per hour?

Accepted Answer

A)  5 units per hour 
B)  3 units per hour 
C)  6 units per hour 
D)  10 units per hour 
E)  15 units per hour 
A)  5 units per hour 
B)  3 units per hour 
C)  6 units per hour 
D)  10 units per hour 
E)  15 units per hour

Question 7

In negotiated transfer pricing, the buying division sets the ceiling (maximum possible transfer price) for the bargaining range.

Accepted Answer

A) True 
 B)False

Question 8

Select the appropriate definition for each of the items listed below.
-The most common measure of performance for an investment center.

Accepted Answer

A) Turnover 
B) Margin 
C) ROI 
D) Residual income 
A) Turnover 
B) Margin 
C) ROI 
D) Residual income

Question 9

In a decentralized company, overall profit margins can mask inefficiencies within the various subdivisions.

Accepted Answer

A) True 
 B)False

Question 10

The number of units of output that can be produced in a given period of time is called

Accepted Answer

A)  cycle time. 
B)  unit process time. 
C)  responsiveness. 
D)  cell conversion time. 
E)  velocity. 
A)  cycle time. 
B)  unit process time. 
C)  responsiveness. 
D)  cell conversion time. 
E)  velocity.

Question 11

The decision-making approach that allows managers at lower levels to make and implement key decisions pertaining to their areas of responsibility is

Accepted Answer

A)  responsibility accounting. 
B)  controllable accounting. 
C)  decentralization. 
D)  optimal strategic accounting. 
E)  None of these. 
A)  responsibility accounting. 
B)  controllable accounting. 
C)  decentralization. 
D)  optimal strategic accounting. 
E)  None of these.

Question 12

The process value chain consists of

Accepted Answer

A)  value, operations, and objectives. 
B)  innovation, satisfaction, and value. 
C)  innovation, operations, and post-sales service. 
D)  design, production, and selling. 
E)  design, satisfaction, and post-sales service. 
A)  value, operations, and objectives. 
B)  innovation, satisfaction, and value. 
C)  innovation, operations, and post-sales service. 
D)  design, production, and selling. 
E)  design, satisfaction, and post-sales service.

Question 13

A key feature of economic value added (EVA) is that it emphasizes after-tax operating income and the actual cost of capital.

Accepted Answer

A) True 
 B)False

Question 14

The selling division would never agree to a transfer price below its full manufacturing cost.

Accepted Answer

A) True 
 B)False

Question 15

Using EVA to calculate residual income, the dollar cost of capital employed is the actual percentage cost of capital multiplied by the total capital employed.

Accepted Answer

A) True 
 B)False

Question 16

The minimum return on investment (ROI) required to accept an investment is:

Accepted Answer

A)  economic value added. 
B)  the operating income. 
C)  the hurdle rate. 
D)  the residual income. 
A)  economic value added. 
B)  the operating income. 
C)  the hurdle rate. 
D)  the residual income.

Question 17

When the selling division can sell and the buying division can buy externally at the market price, the company as a whole will be in the same position whether or not a market price transfer takes place internally.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following formulas calculates the return on investment (ROI)?

Accepted Answer

A)  Operating Income / Average Operating Assets 
B)  After-tax Operating Income / Total Capital Employed 
C)  Operating Income / Minimum Expected Return 
D)  Residual Income / Sales 
E)  Total Capital Employed / Operating Income 
A)  Operating Income / Average Operating Assets 
B)  After-tax Operating Income / Total Capital Employed 
C)  Operating Income / Minimum Expected Return 
D)  Residual Income / Sales 
E)  Total Capital Employed / Operating Income

Question 19

A ____________________ is a segment of the business whose manager is accountable for specific sets of activities.

Accepted Answer

responsibi

Question 20

When a manager is responsible for only costs it is known as a(n) _______________.

Accepted Answer

The answer of When a manager is responsible for only...

Economic Value Added is residual income with the cost of capital equal to the firm's

Which of the following is an absolute dollar measure rather than a percentage?

Select the term from below to match with the correct statement. -A(n) ___________ is a responsibility center in which a manager is responsible only for sales, or revenues.

Last week, Davis worked for 50 hours and produced 250 business card boxes. - What is the velocity in business card boxes per hour?

In negotiated transfer pricing, the buying division sets the ceiling (maximum possible transfer price) for the bargaining range.

Select the appropriate definition for each of the items listed below. -The most common measure of performance for an investment center.

In a decentralized company, overall profit margins can mask inefficiencies within the various subdivisions.

The number of units of output that can be produced in a given period of time is called

The decision-making approach that allows managers at lower levels to make and implement key decisions pertaining to their areas of responsibility is

The process value chain consists of

A key feature of economic value added (EVA) is that it emphasizes after-tax operating income and the actual cost of capital.

The selling division would never agree to a transfer price below its full manufacturing cost.

Using EVA to calculate residual income, the dollar cost of capital employed is the actual percentage cost of capital multiplied by the total capital employed.

The minimum return on investment (ROI) required to accept an investment is:

When the selling division can sell and the buying division can buy externally at the market price, the company as a whole will be in the same position whether or not a market price transfer takes place internally.

Which of the following formulas calculates the return on investment (ROI)?

A ____________________ is a segment of the business whose manager is accountable for specific sets of activities.

When a manager is responsible for only costs it is known as a(n) _______________.

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior, Cost Forecasting, and Segmented Income Statements

Job-Order Costing and Normal Cost Overhead Application

Activity-Based Costing and Management

Process Costing

Cost-Volume-Profit Analysis

Tactical Decision-Making and Relevant Costing

Profit Planning and Flexible Budgets

Standard Costing and Variance Analysis

Capital Investment Decisions

Emerging Topics in Managerial Accounting: Sustainability, Quality Cost, Lean Accounting, International Issues, Enterprise Risk Management, the Managerial Accountant in Forensicfraud Accounting

Statement of Cash Flows

Financial Statement Analysis

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Exam 11: Performance Evaluation and Decentralization

Economic Value Added is residual income with the cost of capital equal to the firm's

Which of the following is an absolute dollar measure rather than a percentage?

Select the term from below to match with the correct statement. -A(n) ___________ is a responsibility center in which a manager is responsible only for sales, or revenues.

Last week, Davis worked for 50 hours and produced 250 business card boxes. - What is the velocity in business card boxes per hour?

In negotiated transfer pricing, the buying division sets the ceiling (maximum possible transfer price) for the bargaining range.

Select the appropriate definition for each of the items listed below. -The most common measure of performance for an investment center.

In a decentralized company, overall profit margins can mask inefficiencies within the various subdivisions.

The number of units of output that can be produced in a given period of time is called

The decision-making approach that allows managers at lower levels to make and implement key decisions pertaining to their areas of responsibility is

The process value chain consists of

A key feature of economic value added (EVA) is that it emphasizes after-tax operating income and the actual cost of capital.

The selling division would never agree to a transfer price below its full manufacturing cost.

Using EVA to calculate residual income, the dollar cost of capital employed is the actual percentage cost of capital multiplied by the total capital employed.

The minimum return on investment (ROI) required to accept an investment is:

When the selling division can sell and the buying division can buy externally at the market price, the company as a whole will be in the same position whether or not a market price transfer takes place internally.

Which of the following formulas calculates the return on investment (ROI)?

A ____________________ is a segment of the business whose manager is accountable for specific sets of activities.

When a manager is responsible for only costs it is known as a(n) _______________.

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior, Cost Forecasting, and Segmented Income Statements

Job-Order Costing and Normal Cost Overhead Application

Activity-Based Costing and Management

Process Costing

Cost-Volume-Profit Analysis

Tactical Decision-Making and Relevant Costing

Profit Planning and Flexible Budgets

Standard Costing and Variance Analysis

Capital Investment Decisions

Emerging Topics in Managerial Accounting: Sustainability, Quality Cost, Lean Accounting, International Issues, Enterprise Risk Management, the Managerial Accountant in Forensicfraud Accounting

Statement of Cash Flows

Financial Statement Analysis

Filters