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Exam 14: Performance Evaluation for Decentralized Operations

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Question 31

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Responsibility accounting reports for profit centers will include

A) costs.
B) revenues.
C) expenses and fixed assets.
D) revenues,expenses,and net income or loss from operations.

E) C) and D)
F) A) and B)

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Question 32

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Operating expenses directly traceable to or incurred for the sole benefit of a specific department and usually subject to the control of the department manager are termed

A) miscellaneous administrative expenses.
B) indirect expenses.
C) direct expenses.
D) operating expenses.

E) B) and C)
F) A) and C)

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Question 33

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If income from operations for a division is $30,000,sales are $243,750,and invested assets are $187,500,the investment turnover is 1.3.

Which of the following expressions is termed the investment turnover factor as used in determining the rate of return on investment?

Assume that divisional income from operations amounts to $187,000 and top management has established 12% as the minimum rate of return on divisional assets totaling $1,000,000.The residual income for the division is

For higher levels of management,responsibility accounting reports

If income from operations for a division is $6,000,invested assets are $25,000,and sales are $30,000,the profit margin is 20%.

A common balanced scorecard measures performance in all of the following areas EXCEPT

Which of the following is NOT a commonly used approach to setting transfer prices?

The manager of the furniture department of a leading retailer does NOT control the salaries of departmental personnel.

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

Operating expenses directly traceable to or incurred for the sole benefit of a specific department and usually subject to the control of the department manager are termed indirect expenses.

If the profit margin for a division is 11% and the investment turnover is 1.5,the rate of return on investment is 16.5%.

The ratio of sales to invested assets is termed investment turnover.

Personnel administration expense for a department in a store is an indirect expense.

The following data are taken from the management accounting reports of Dancer Co.: If an incentive bonus is paid to the manager who achieved the highest income from operations before service department charges,it follows that

The sales,income from operations,and invested assets for each division of Salem Company are as follows: Management has established a minimum rate of return for invested assets of 11%.

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

A responsibility center in which the department manager has responsibility for and authority over costs in the department is termed a cost center.

Which of the following would NOT be considered an internal centralized service department?