Question 1

The balanced scorecard evaluates managers on financial and nonfinancial measures of performance.

Accepted Answer

A) True 
 B)False

Question 2

The manager of a profit center does NOT make decisions concerning the fixed assets invested in the center.

Accepted Answer

A) True 
 B)False

Question 3

Identify the formula for the rate of return on investment.

Accepted Answer

A) Invested Assets/Income From Operations 
B) Sales/Invested Assets 
C) Income From Operations/Sales 
D) Income From Operations/Invested Assets 
A) Invested Assets/Income From Operations 
B) Sales/Invested Assets 
C) Income From Operations/Sales 
D) Income From Operations/Invested Assets

Question 4

In a profit center,the department manager has responsibility for and the authority to make decisions that affect

Accepted Answer

A) not only costs and revenues,but also assets invested in the center. 
B) the assets invested in the center,but not costs and revenues. 
C) both costs and revenues for the department or division. 
D) costs and assets invested in the center,but not revenues. 
A) not only costs and revenues,but also assets invested in the center. 
B) the assets invested in the center,but not costs and revenues. 
C) both costs and revenues for the department or division. 
D) costs and assets invested in the center,but not revenues.

Question 5

Blancher Corporation had $495,000 in invested assets,sales of $660,000,income from operations amounting to $99,000,and a desired minimum rate of return of 15%.The investment turnover for Stevenson is

Accepted Answer

A) 1.20. 
B) 1.00. 
C) 1.10. 
D) 1.33. 
A) 1.20. 
B) 1.00. 
C) 1.10. 
D) 1.33.

Question 6

Investment turnover (as used in determining the rate of return on investment)focuses on the rate of profit earned on each sales dollar.

Accepted Answer

A) True 
 B)False

Question 7

It is beneficial for two related companies to use the cost price approach for transfer pricing when both of the companies operate as cost centers and are not concerned with the revenue.

Accepted Answer

A) True 
 B)False

Question 8

The negotiated price approach allows the managers of decentralized units to agree among themselves as to the transfer price.

Accepted Answer

A) True 
 B)False

Question 9

The sales,income from operations,and invested assets for each division of Garner Company are as follows:

Accepted Answer

@#IMG-DLM& 
ROI = Profit Margin @#LAT-DLM& Investm

Question 10

In a cost center,the manager has responsibility and authority for making decisions that affect

Accepted Answer

A) revenues. 
B) assets. 
C) costs. 
D) both costs and revenues. 
A) revenues. 
B) assets. 
C) costs. 
D) both costs and revenues.

Question 11

Division Q for Mott Company has a rate of return on investment of 28% and an investment turnover of 1.4.What is the profit margin?

Accepted Answer

A) 28% 
B) 20% 
C) 14% 
D) 39.2% 
A) 28% 
B) 20% 
C) 14% 
D) 39.2%

Question 12

How much would Boone's total income from operations increase?

Accepted Answer

A) $180,000 
B) $240,000 
C) $120,000 
D) $300,000 
A) $180,000 
B) $240,000 
C) $120,000 
D) $300,000

Question 13

Under the negotiated price approach,the transfer price is the price at which the product or service transferred could be sold to outside buyers.

Accepted Answer

A) True 
 B)False

Question 14

Purchase requisitions for Purchasing and the number of payroll checks for Payroll Accounting are examples of activity bases.

Accepted Answer

A) True 
 B)False

Question 15

Assume that Division X has generated sales revenue of $3,025,000 and achieved income from operations of $242,000 using $1,800,000 of invested assets.If management desires a minimum rate of return of 12%,the residual income is

Accepted Answer

A) $26,000. 
B) $29,040. 
C) $147,000. 
D) $186,960. 
A) $26,000. 
B) $29,040. 
C) $147,000. 
D) $186,960.

Question 16

Controllable expenses are those that can be influenced by the decisions of the profit center management.

Accepted Answer

A) True 
 B)False

Question 17

A portion of the divisional income statement for the year just ended is presented below in condensed form.
   
The operating expenses of Department F include $16,000 for direct expenses.
It is estimated that the discontinuance of Department F would not have affected the sales of the other departments nor have reduced the indirect expenses of the business.Assuming the accuracy of these estimates,determine the effect (increase or decrease and amount)on the income from operations of the business if Department F had been discontinued.

Accepted Answer

$5,400 decrease,which is the i

Question 18

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

Accepted Answer

A) Invested assets 
B) Residual income 
C) Direct expenses 
D) Sales 
A) Invested assets 
B) Residual income 
C) Direct expenses 
D) Sales

Question 19

The underlying principle of allocating operating expenses to departments is to assign to each department an amount of expense proportional to the revenues of that department.

Accepted Answer

A) True 
 B)False

Question 20

How much would Division 3's income from operations increase?

Accepted Answer

A) $150,000 
B) $50,000 
C) $100,000 
D) $25,000 
A) $150,000 
B) $50,000 
C) $100,000 
D) $25,000

The balanced scorecard evaluates managers on financial and nonfinancial measures of performance.

The manager of a profit center does NOT make decisions concerning the fixed assets invested in the center.

Identify the formula for the rate of return on investment.

In a profit center,the department manager has responsibility for and the authority to make decisions that affect

Blancher Corporation had $495,000 in invested assets,sales of $660,000,income from operations amounting to $99,000,and a desired minimum rate of return of 15%.The investment turnover for Stevenson is

Investment turnover (as used in determining the rate of return on investment)focuses on the rate of profit earned on each sales dollar.

It is beneficial for two related companies to use the cost price approach for transfer pricing when both of the companies operate as cost centers and are not concerned with the revenue.

The negotiated price approach allows the managers of decentralized units to agree among themselves as to the transfer price.

The sales,income from operations,and invested assets for each division of Garner Company are as follows:

In a cost center,the manager has responsibility and authority for making decisions that affect

Division Q for Mott Company has a rate of return on investment of 28% and an investment turnover of 1.4.What is the profit margin?

How much would Boone's total income from operations increase?

Under the negotiated price approach,the transfer price is the price at which the product or service transferred could be sold to outside buyers.

Purchase requisitions for Purchasing and the number of payroll checks for Payroll Accounting are examples of activity bases.

Assume that Division X has generated sales revenue of $3,025,000 and achieved income from operations of $242,000 using $1,800,000 of invested assets.If management desires a minimum rate of return of 12%,the residual income is

Controllable expenses are those that can be influenced by the decisions of the profit center management.

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

The underlying principle of allocating operating expenses to departments is to assign to each department an amount of expense proportional to the revenues of that department.

How much would Division 3's income from operations increase?

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley,internal Control,and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Capital Investment Analysis

Filters

Exam 14: Performance Evaluation for Decentralized Operations

The balanced scorecard evaluates managers on financial and nonfinancial measures of performance.

The manager of a profit center does NOT make decisions concerning the fixed assets invested in the center.

Identify the formula for the rate of return on investment.

In a profit center,the department manager has responsibility for and the authority to make decisions that affect

Blancher Corporation had $495,000 in invested assets,sales of $660,000,income from operations amounting to $99,000,and a desired minimum rate of return of 15%.The investment turnover for Stevenson is

Investment turnover (as used in determining the rate of return on investment)focuses on the rate of profit earned on each sales dollar.

It is beneficial for two related companies to use the cost price approach for transfer pricing when both of the companies operate as cost centers and are not concerned with the revenue.

The negotiated price approach allows the managers of decentralized units to agree among themselves as to the transfer price.

The sales,income from operations,and invested assets for each division of Garner Company are as follows:

In a cost center,the manager has responsibility and authority for making decisions that affect

Division Q for Mott Company has a rate of return on investment of 28% and an investment turnover of 1.4.What is the profit margin?

How much would Boone's total income from operations increase?

Under the negotiated price approach,the transfer price is the price at which the product or service transferred could be sold to outside buyers.

Purchase requisitions for Purchasing and the number of payroll checks for Payroll Accounting are examples of activity bases.

Assume that Division X has generated sales revenue of $3,025,000 and achieved income from operations of $242,000 using $1,800,000 of invested assets.If management desires a minimum rate of return of 12%,the residual income is

Controllable expenses are those that can be influenced by the decisions of the profit center management.

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

The underlying principle of allocating operating expenses to departments is to assign to each department an amount of expense proportional to the revenues of that department.

How much would Division 3's income from operations increase?

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley,internal Control,and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Capital Investment Analysis

Filters