Question 1

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 miles

Accepted Answer

A)  Purchasing
B)  Payroll accounting
C)  Human resources
D)  Maintenance
E)  Information systemsF) MarketingG) President's OfficeH) TransportationI) C) and D)
J) B) and G)

Question 2

Division A reported income from operations of $975,000 and total service department charges of $675,000.As a result,

Accepted Answer

A)  net income was $300,000
B)  the gross profit margin was $300,000
C)  income from operations before service department charges was $1,650,000
D)  consolidated net income was $300,000E) A) and D)
F) B) and D)

Question 3

Income from operations for Division H is $220,000, and income from operations before service department charges is $975,000.As a result,

Accepted Answer

A)  total operating expenses are $565,000
B)  total manufacturing expenses are $565,000
C)  direct materials, direct labor, and factory overhead total $565,000
D)  total service department charges are $755,000E) None of the above
F) A) and B)

Question 4

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

Accepted Answer

A)  rate of return on stockholders' equity
B)  investment turnover
C)  income from operations
D)  inventory turnoverE) All of the above
F) A) and D)

Question 5

Miller's Quarter Horse Company has sales of $4,500,000.It also has invested assets of $2,500,000 and operating expenses of $3,800,000.The company has established a minimum rate of return of 7%.
a What is Miller's profit margin?
b What is the investment turnover?
c What is the rate of return on investment?
d What is Miller's residual income?

Accepted Answer

a $4,500,000 - $3,800,000 = $7...

Question 6

Match each definition that follows with the term a-e it defines.
-Earned by profit centers

Accepted Answer

A)  Controllable revenues
B)  Profit margin
C)  Investment turnover
D)  Rate of return on investments
E)  Residual incomeF) All of the above
G) A) and D)

Question 7

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

Accepted Answer

A)  $300,000
B)  $325,000
C)  $550,000
D)  $200,000E) B) and C)
F) A) and D)

Question 8

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

Accepted Answer

A)  cost center
B)  profit center
C)  investment center
D)  revenue centerE) B) and C)
F) B) and D)

Question 9

How much service department cost will be allocated to the Micro Division?

Accepted Answer

A)  $200,000
B)  $145,000
C)  $60,000
D)  $345,000E) None of the above
F) A) and B)

Question 10

Which of the following is a measure of a manager's performance working in an investment center?

Accepted Answer

A)  rate of return on investment
B)  residual income
C)  divisional income statements
D)  all of theseE) C) and D)
F) A) and B)

Question 11

The profit margin is the

Accepted Answer

A)  ratio of income from operations to sales
B)  ratio of income from operations to invested assets
C)  ratio of assets to liabilities
D)  ratio of sales to invested assetsE) None of the above
F) A) and B)

Question 12

How much will Division 6's income from operations increase?

Accepted Answer

A)  $8,000
B)  $15,000
C)  $80,000
D)  $150,000E) All of the above
F) None of the above

Question 13

The profit center income statement should include only controllable revenues and expenses.

Accepted Answer

A) True 
 B)False

Question 14

The ratio of sales to invested assets, which is also a factor in the DuPont formula for determing the rate of return on investment, is called

Accepted Answer

A)  profit margin
B)  indirect margin
C)  investment turnover
D)  cost ratioE) None of the above
F) All of the above

Question 15

Which of the following expenses incurred by the sporting goods department of a department store is a direct expense?

Accepted Answer

A)  depreciation expense-office equipment
B)  insurance on inventory of sporting goods
C)  uncollectible accounts expense
D)  office salariesE) B) and C)
F) A) and B)

Question 16

Match each of the following phrases as describing a an advantage, b a disadvantage, or c neither of decentralization.
-Internal price wars

Accepted Answer

A)  Advantage of decentralization
B)  Disadvantage of decentralization
C)  Neither an advantage or disadvantageD) A) and B)
E) A) and C)

Question 17

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?

Accepted Answer

A)  $650,000
B)  $3,000,000
C)  $3,400,000
D)  $2,750,000E) None of the above
F) A) and D)

Question 18

The sales, income from operations, invested assets, and residual income for each division of Marcus Company are as follows:
  Determine the minimum rate of return for invested assets.

Accepted Answer

Division X: $645,000 - $4,100,...

Question 19

Ralston Company has income from operations of $75,000, invested assets of $360,000, and sales of $790,000.
Use the DuPont formula to calculate the rate of return on investment, and show a the profit margin, b the investment turnover, and c rate of return on investment.Round the profit margin percentage to two decimal places and the investment turnover to three decimal places.

Accepted Answer

The answer of Ralston Company has income from operations of...

Question 20

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 advertising campaigns

Accepted Answer

A)  Purchasing
B)  Payroll accounting
C)  Human resources
D)  Maintenance
E)  Information systemsF) MarketingG) President's OfficeH) TransportationI) C) and G)
J) C) and E)

Exam 8: Performance Evaluation for Decentralized Operations

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

Correct Answer
verified

Correct Answer
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a $4,500,000 - $3,800,000 = $7...
View Answer

Division A reported income from operations of $975,000 and total service department charges of $675,000.As a result,

Correct Answer
verified

The ratio of sales to invested assets, which is also a factor in the DuPont formula for determing the rate of return on investment, is called

Correct Answer
verified

Income from operations for Division H is $220,000, and income from operations before service department charges is $975,000.As a result,

Correct Answer
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Match each of the following phrases as describing a an advantage, b a disadvantage, or c neither of decentralization. -Internal price wars

Correct Answer
verified

Correct Answer
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Which of the following is a measure of a manager's performance working in an investment center?

Correct Answer
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The profit margin is the

Correct Answer
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How much service department cost will be allocated to the Micro Division?

Correct Answer
verified

The sales, income from operations, invested assets, and residual income for each division of Marcus Company are as follows: Determine the minimum rate of return for invested assets.

Correct Answer
verified
Division X: $645,000 - $4,100,...
View Answer

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?

Correct Answer
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Match each definition that follows with the term a-e it defines. -Earned by profit centers

Correct Answer
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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 miles

Correct Answer
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The profit center income statement should include only controllable revenues and expenses.

Correct Answer
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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 advertising campaigns

Correct Answer
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How much will Division 6's income from operations increase?

Correct Answer
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Which of the following expenses incurred by the sporting goods department of a department store is a direct expense?

Correct Answer
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What will the income of the Super Division be after all service department allocations?

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

Correct Answer
verified

Exam 8: Performance Evaluation for Decentralized Operations

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

Correct AnswerverifiedShow Answer

Correct Answerverifieda $4,500,000 - $3,800,000 = $7...View AnswerShow Answer

Division A reported income from operations of $975,000 and total service department charges of $675,000.As a result,

Correct AnswerverifiedShow Answer

The ratio of sales to invested assets, which is also a factor in the DuPont formula for determing the rate of return on investment, is called

Correct AnswerverifiedShow Answer

Income from operations for Division H is $220,000, and income from operations before service department charges is $975,000.As a result,

Correct AnswerverifiedShow Answer

Match each of the following phrases as describing a an advantage, b a disadvantage, or c neither of decentralization. -Internal price wars

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is a measure of a manager's performance working in an investment center?

Correct AnswerverifiedShow Answer

The profit margin is the

Correct AnswerverifiedShow Answer

How much service department cost will be allocated to the Micro Division?

Correct AnswerverifiedShow Answer

The sales, income from operations, invested assets, and residual income for each division of Marcus Company are as follows: Determine the minimum rate of return for invested assets.

Correct AnswerverifiedDivision X: $645,000 - $4,100,...View AnswerShow Answer

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?

Correct AnswerverifiedShow Answer

Match each definition that follows with the term a-e it defines. -Earned by profit centers

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 miles

Correct AnswerverifiedShow Answer

The profit center income statement should include only controllable revenues and expenses.

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 advertising campaigns

Correct AnswerverifiedShow Answer

How much will Division 6's income from operations increase?

Correct AnswerverifiedShow Answer

Which of the following expenses incurred by the sporting goods department of a department store is a direct expense?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
a $4,500,000 - $3,800,000 = $7...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
Division X: $645,000 - $4,100,...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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