Question 1

Materials used by Layton Company's Division 1 are currently purchased from an outside supplier at $58 per unit. Division 2 is able to supply Division 1 with 22,000 units at a variable cost of $46 per unit. The two divisions have recently negotiated a transfer price of $50 per unit for the 20,000 units.?
(a) By how much will each division's income increase as a result of this transfer?
(b) What is the total increase in income for Layton?

Accepted Answer

The answer of Materials used by Layton Company's Division 1...

Question 2

The profit margin is the ratio of

Accepted Answer

A)   income from operations to sales
B)   income from operations to invested assets
C)   assets to liabilities
D)   sales to invested assetsE) All of the above
F) A) and C)

Question 3

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

Accepted Answer

A)   invested assets
B)   residual income
C)   direct expenses
D)   salesE) A) and B)
F) A) and C)

Question 4

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.

Accepted Answer

A) True 
 B)False

Question 5

Xang Company's costs were over budget by $46,000. Xang Company is divided into two regions. The first region's costs were over budget by $7,000.​Determine the amount that the second region's costs were over or under budget.

Accepted Answer

$46,000 - ...

Question 6

Magnolia Company's Division A has income from operations of $80,000 and assets of $400,000. The minimum acceptable return on assets is 12%. What is the residual income for the division?

Accepted Answer

The answer of Magnolia Company's Division A has income from...

Question 7

Match each definition that follows with the term (a-e)  it defines.
-Income from operations minus minimum acceptable income from operations

Accepted Answer

A)  Controllable revenues
B)  Profit margin
C)  Investment turnover
D)  Return on investment
E)  Residual incomeF) B) and D)
G) B) and C)

Question 8

Which of the following expenses incurred by a department store is an indirect expense?

Accepted Answer

A)   insurance on merchandise inventory
B)   sales salaries
C)   depreciation on store equipment
D)   salary of vice president of financeE) B) and C)
F) A) and C)

Question 9

Use this information for Train Corporation to answer the questions that follow.
​
The following financial information was summarized from the accounting records of Train Corporation for the current year ended December 31:
​
 
-The gross profit for the Locomotive Division is

Accepted Answer

A)   $57,960
B)   $14,790
C)   $27,240
D)   $47,280E) B) and C)
F) C) and D)

Question 10

An activity base is used to charge service department expenses. Match each of the following activity bases with the appropriate department (a-h) .
-Number of payroll checks

Accepted Answer

A)  Purchasing
B)  Payroll Accounting
C)  Human Resources
D)  Maintenance
E)  Information SystemsF) MarketingG) President's OfficeH) TransportationI) E) and G)
J) None of the above

Question 11

Several items are missing from the following table of return on investment and residual income. Determine the missing items, identifying each item by the appropriate letter 
(a-l). Round percentage values to one decimal place.​

Accepted Answer

The answer of Several items are missing from the following...

Question 12

Use this information for ABC Corporation to answer the questions that follow.
​
ABC Corporation has three service departments with the following costs and activity base:
​
  ABC has three operating divisions, Micro, Macro and Super. Their revenue, cost and activity information is as follows:
​
 
-How much service department cost would be allocated to the Super Division?

Accepted Answer

A)   $350,000
B)   $100,000
C)   $125,000
D)   $550,000E) None of the above
F) C) and D)

Question 13

The Central Division of Chemical Company has a return on investment of 22% and an investment turnover of 1.4. What is the profit margin?

Accepted Answer

A)   20%
B)   15.7%
C)   14%
D)   6.36%E) A) and B)
F) None of the above

Question 14

Depreciation expense on store equipment for a department store is an indirect expense.

Accepted Answer

A) True 
 B)False

Question 15

Responsibility accounting reports for profit centers are normally in the form of income statements.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A)   return on stockholders' equity
B)   investment turnover
C)   income from operations
D)   inventory turnoverE) None of the above
F) A) and B)

Question 17

An activity base is used to charge service department expenses. Match each of the following activity bases with the appropriate department (a-h) .
-Number of employees

Accepted Answer

A)  Purchasing
B)  Payroll Accounting
C)  Human Resources
D)  Maintenance
E)  Information SystemsF) MarketingG) President's OfficeH) TransportationI) F) and H)
J) B) and C)

Question 18

Use this information for Train Corporation to answer the questions that follow.
​
The following financial information was summarized from the accounting records of Train Corporation for the current year ended December 31:
​
 
-The income from operations for the Rails Division is

Accepted Answer

A)   $60,800
B)   $33,600
C)   $8,700
D)   $21,150E) C) and D)
F) None of the above

Question 19

What is the profit margin for Division D?

Accepted Answer

A)   42.9%
B)   83.4%
C)   49.1%
D)   65.7%E) A) and B)
F) A) and C)

Question 20

Use this information for ABC Corporation to answer the questions that follow.
​
ABC Corporation has three service departments with the following costs and activity base:
​
  ABC has three operating divisions, Micro, Macro and Super. Their revenue, cost and activity information is as follows:
​
 
-What is Clydesdale Company's return on investment?

Accepted Answer

A)   56%
B)   20%
C)   45%
D)   25%E) None of the above
F) A) and B)

Exam 23: Decentralized Operations

Match each definition that follows with the term (a-e) it defines. -Income from operations minus minimum acceptable income from operations

Correct Answer
verified

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.

Correct Answer
verified

What is the profit margin for Division D?

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Use this information for Train Corporation to answer the questions that follow. The following financial information was summarized from the accounting records of Train Corporation for the current year ended December 31: -The income from operations for the Rails Division is

Correct Answer
verified

Xang Company's costs were over budget by $46,000. Xang Company is divided into two regions. The first region's costs were over budget by $7,000.Determine the amount that the second region's costs were over or under budget.

Correct Answer
verified
$46,000 - ...
View Answer

Correct Answer
verified

Magnolia Company's Division A has income from operations of $80,000 and assets of $400,000. The minimum acceptable return on assets is 12%. What is the residual income for the division?

Correct Answer
verified

Which of the following expenses incurred by a department store is an indirect expense?

Correct Answer
verified

Responsibility accounting reports for profit centers are normally in the form of income statements.

Correct Answer
verified

Use this information for Train Corporation to answer the questions that follow. The following financial information was summarized from the accounting records of Train Corporation for the current year ended December 31: -The gross profit for the Locomotive Division is

Correct Answer
verified

An activity base is used to charge service department expenses. Match each of the following activity bases with the appropriate department (a-h) . -Number of payroll checks

Correct Answer
verified

The profit margin is the ratio of

Correct Answer
verified

An activity base is used to charge service department expenses. Match each of the following activity bases with the appropriate department (a-h) . -Number of employees

Correct Answer
verified

The Central Division of Chemical Company has a return on investment of 22% and an investment turnover of 1.4. What is the profit margin?

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Several items are missing from the following table of return on investment and residual income. Determine the missing items, identifying each item by the appropriate letter (a-l). Round percentage values to one decimal place.

Correct Answer
verified

Depreciation expense on store equipment for a department store is an indirect expense.

Correct Answer
verified

Exam 23: Decentralized Operations

Match each definition that follows with the term (a-e) it defines. -Income from operations minus minimum acceptable income from operations

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

What is the profit margin for Division D?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Use this information for Train Corporation to answer the questions that follow. ​ The following financial information was summarized from the accounting records of Train Corporation for the current year ended December 31: ​ -The income from operations for the Rails Division is

Correct AnswerverifiedShow Answer

Xang Company's costs were over budget by $46,000. Xang Company is divided into two regions. The first region's costs were over budget by $7,000.​Determine the amount that the second region's costs were over or under budget.

Correct Answerverified$46,000 - ...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Magnolia Company's Division A has income from operations of $80,000 and assets of $400,000. The minimum acceptable return on assets is 12%. What is the residual income for the division?

Correct AnswerverifiedShow Answer

Which of the following expenses incurred by a department store is an indirect expense?

Correct AnswerverifiedShow Answer

Responsibility accounting reports for profit centers are normally in the form of income statements.

Correct AnswerverifiedShow Answer

Use this information for Train Corporation to answer the questions that follow. ​ The following financial information was summarized from the accounting records of Train Corporation for the current year ended December 31: ​ -The gross profit for the Locomotive Division is

Correct AnswerverifiedShow Answer

An activity base is used to charge service department expenses. Match each of the following activity bases with the appropriate department (a-h) . -Number of payroll checks

Correct AnswerverifiedShow Answer

The profit margin is the ratio of

Correct AnswerverifiedShow Answer

An activity base is used to charge service department expenses. Match each of the following activity bases with the appropriate department (a-h) . -Number of employees

Correct AnswerverifiedShow Answer

The Central Division of Chemical Company has a return on investment of 22% and an investment turnover of 1.4. What is the profit margin?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Several items are missing from the following table of return on investment and residual income. Determine the missing items, identifying each item by the appropriate letter (a-l). Round percentage values to one decimal place.​

Correct AnswerverifiedShow Answer

Depreciation expense on store equipment for a department store is an indirect expense.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Use this information for Train Corporation to answer the questions that follow. The following financial information was summarized from the accounting records of Train Corporation for the current year ended December 31: -The income from operations for the Rails Division is

Correct Answer
verified

Xang Company's costs were over budget by $46,000. Xang Company is divided into two regions. The first region's costs were over budget by $7,000.Determine the amount that the second region's costs were over or under budget.

Correct Answer
verified
$46,000 - ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Use this information for Train Corporation to answer the questions that follow. The following financial information was summarized from the accounting records of Train Corporation for the current year ended December 31: -The gross profit for the Locomotive Division is

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Several items are missing from the following table of return on investment and residual income. Determine the missing items, identifying each item by the appropriate letter (a-l). Round percentage values to one decimal place.

Correct Answer
verified

Correct Answer
verified