Responsibility Accounting and Performance Measures MCQs

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Fairmount, Inc., uses an accounting system that charges costs to the manager who has been delegated the authority to make the decisions incurring the ...






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The basic purpose of a responsibility accounting system is






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In responsibility accounting, a center’s performance is measured by controllable costs. Controllable costs arebest described as including






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A segment of an organization is referred to as a service center if it has






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The least complex segment or area of responsibility for which costs are allocated is a(n)






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Responsibility accounting defines an operating center that is responsible for revenue and costs as a(n)






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Decentralized firms can delegate authority and yet retain control and monitor managers performance by structuring the organization into responsibilit...






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A successful responsibility accounting reporting system is dependent upon






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Sherman Company uses a performance reporting system that reflects the companys decentralization of decision making. The departmental performance repo...






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Micro Manufacturers uses an accounting system that charges costs to the manager who has been delegated the authority to make the decisions incurring t...






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In a highly decentralized organization, the best option for measuring the performance of subunits is the establishment of






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A segment of an organization is referred to as a profit center if it has






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A segment of an organization is referred to as an investment center if it has






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The Stonebrook Company uses a performance reporting system that reflects the companys decentralization of decision making. The departmental performan...






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Digital Tech uses an accounting system that charges costs to the manager who has the authority to make decisions incurring the costs. For example, if ...






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If a manufacturing company uses responsibility accounting, which one of the following items is least likely to appear in a performance report for a ma...






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Which of the following is not true of responsibility accounting?






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A company plans to implement a bonus plan based on segment performance. In addition, the company plans to convert to a responsibility accounting syste...






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In a responsibility accounting system, managers are accountable for






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Which of the following types of responsibility centers include controllable revenues in their performance reports? Cost Centers Investment Centers ...






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Periodic internal reports used for performance evaluation purposes and based on a responsibility accounting system should not include






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Which one of the following best identifies a profit center?






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Characteristics of a responsibility accounting system include all of the following except that






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Responsibility costs motivate managers of responsibility centers to act in the organizations interest. The attribute that would be least persuasive i...






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Making segment disclosures is an advantage to a company because it






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Sara Bellows, manager of the telecommunication sales team, has the following department budget. Billings -- long distance $350,000 Billings -- phon...






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An organization employs a system of internal reporting that furnishes departmental managers with revenue and cost information on only those items that...






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Jonathan Roger is the marketing manager for a local recreational sports complex. Rogers role in the marketing department is to advertise events, meet...






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A manager who is accountable for both income statement and balance sheet items is responsible for a(n)






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A cosmetics company is expanding its marketing presence by placing stores within a national department store chain. The cosmetics company hires its ow...






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The segment margin of the Wire Division of Lerner Corporation should not include






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When using a contribution margin format for internal reporting purposes, the major distinction between segment manager performance and segment perform...






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Which of the following techniques would be best for evaluating the management performance of a department that is operated as a cost center?






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Harris Co.’s income statement for profit center No. 12 for August includes Contribution margin $84,000 Manager’s salary 24,000 Depreciation on acc...






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Ordinarily, the most appropriate basis on which to evaluate the performance of a division manager is the divisions






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A firm prepared a segmented income statement that included the following data for its suburban marketing segment: Fixed costs controllable by the su...






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David Burke is manager of claims processing for Continental Health Care System. His performance is evaluated using various measures agreed upon in ad...






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Paul Cooper, shipping manager for DFG Distributors, is responsible for managing the staff and all related transportation equipment to fill orders for...






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P.C. Programs, Inc., produces software for individual users and small businesses. Rita Morgan manages the customer hotline department for the firm an...






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Which one of the following should be used for evaluating the performance of the Repair and Maintenance Department that repairs production equipment in...






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Albert Hathaway recently joined Brannen University as the chief information officer of the University Computing Services Department. His assigned task...






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Which of the following is a characteristic of a contribution income statement?






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The imputed interest rate used in the residual income approach to performance evaluation can best be described as the






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A firm earning a profit can increase its return on investment by






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Which one of the following statements pertaining to the return on investment (ROI) as a performance measurement is false?






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Listed below is selected financial information for the Western Division of the Hinzel Company for last year. Amount .....................................






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One approach to measuring divisional performance is return on investment. Return on investment is expressed as operating income






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Return on investment (ROI) is a very popular measure employed to evaluate the performance of corporate segments because it incorporates all of the ma...






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In evaluating an investment center, top management should concentrate on






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Which one of the following will not improve return on investment if other factors are constant?






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To properly motivate divisional management, the divisional ROIs should be






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Which one of the following items would most likely not be incorporated into the calculation of a divisions investment base when using the residual in...






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The segment margin of an investment center after deducting the imputed interest on the assets used by the investment center is known as






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The imputed interest rate used in the residual income approach for performance measurement and evaluation can best be characterized as the






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James Webb is the general manager of the Industrial Product Division, and his performance is measured using the residual income method. Webb is review...






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The basic objective of the residual income approach to performance measurement and evaluation is to have a division maximize its






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After investing in a new project, a company discovered that its residual income remained unchanged. Which one of the following must be true about the ...






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When comparing the residual income of several investment centers, the validity of comparisons may be destroyed by






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The following information relates to Cinder Co.s Northeast Division: Sales $600,000 Variable costs 360,000 Traceable fixed costs 60,000 Average i...






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KHD Industries is a multidivisional firm that evaluates its managers based on the return on investment (ROI) earned by their divisions. The evaluatio...






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The following is an excerpt from a corporations most recent financial statements. Current assets $ 120,000 Total operating assets 1,750,000 Current l...






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A company is considering the addition of a new product line. The new product line is expected to generate a return higher than the cost of capital but...






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Ramirez, Inc., opens a new retail store every 2 years and currently operates in 24 different locations. Ramirez uses return on investment (ROI) to eva...






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The headquarters of a national restaurant chain is trying to better understand the profitability of the Savannah location. Savannahs total assets are...






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A company uses return on investment (ROI) to evaluate year-end divisional performance. Which one of the following inventory practices would most reduc...






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A company uses return on investment (ROI) to measure the performance of its business units. The company manufactures and distributes consumer goods. ...






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Teen Style, a merchandising company, is considering a $1,000,000 upgrade to its retail and warehousing facilities that will allow the company to hand...






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A corporation has set a goal to increase its return on investment (ROI). To facilitate this goal, the corporation has set up an incentive program tha...






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Which statement below best represents a benefit of residual income (RI) as a performance measure?






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REB Service Co. is a computer service center. For the month, REB had the following operating statistics:Sales $450,000 Operating income 25,000 Net pro...






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Charlies Service Co. is a service center. For the year just ended, Charlies had the following operating statistics: Sales $750,000 Operating income ...






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Managerial performance can be measured in many different ways, including return on investment (ROI) and residual income. A good reason for using resid...






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Residual income is a better measure for performance evaluation of an investment center manager than return on investment because






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Edith Carolina, president of the Deed Corporation, requires a minimum return on investment of Fact Pattern:8% for any project to be undertaken by her ...






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Edith Carolina, president of the Deed Corporation, requires a minimum return on investment of Fact Pattern:8% for any project to be undertaken by her ...






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To ensure that a divisional vice president places appropriate focus on both the short- and the long-term objectives of the division, the best approach...






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Brennan Company evaluates the companys managers using management by objectives (MBO). All of the following are considered appropriate goals for measu...






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For several years, Northern Division of Marino Company has maintained a positive residual income. Northern is currently considering investing in a new...






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Oakmont Company has two divisions, Household Appliances and Construction Equipment. The manager of the Household Appliances Division is evaluated on t...






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A company is concerned that its divisional managers are not making decisions that are in the best interests of the overall corporation. In order to pr...






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The following selected information is from the financial statements of Bishop Corporation for the last fiscal year. Current assets $ 500,000 Fixed...






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Cogwin Corporation, a manufacturer of value-priced clothing, measures the performance of its divisions based upon return on investment. If investment...






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When using return on investment (ROI) in local currency to evaluate divisional performance, valuing assets at net book value would result in the highe...






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Which one of the following firms is likely to experience dysfunctional motivation on the part of its managers due to its allocation methods?






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Managers are most likely to accept allocations of common costs based on






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Common costs are






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A large corporation allocates the costs of its headquarters staff to its decentralized divisions. The best reason for this allocation is to






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Most firms allocate corporate and other support costs to divisions and departments for all of the following reasons except to






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Which one of the following allocation approaches will ensure that the production departments do not underestimate their planned usage of service at th...






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Vincent Hospital has installed a new computer system. The system was designed and constructed based on the anticipated number of hours of usage requir...






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Bonnerts Finance Department has purchased a new color copier system for $10,000 that will help with required reporting. Bonnerts IT Department was ...






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An appropriate transfer price between two divisions of The Stark Company can be determined from the following data: Fabricating Division: Market p...






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A limitation of transfer prices based on actual cost is that they






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A proposed transfer price may be based upon the full-cost price. Full-cost price is the price






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Division Z of a company produces a component that it currently sells to outside customers for $20 per unit. At its current level of production, which ...






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Division A of a company is currently operating at 50% capacity. It produces a single product and sells all its production to outside customers for $13...






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Which of the following is not true about international transfer prices for a multinational firm?






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A variable-cost-plus price transfer is






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Which one of the following is an incorrect description of transfer pricing?






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With respect to a firms transfer pricing policy, an advantage of using a dual pricing arrangement is that it