FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 9: Performance Measurement and Responsibility Accounting

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 91

Short Answer

Review LaterAdd Note

Review Later

A ________ provides information for managers to use to evaluate the profitability or cost effectiveness of each department's activities.

Correct Answer

verified

department...

View Answer

Show Answer

Question 92

Multiple Choice

Review LaterAdd Note

Review Later

Two investment centers at Marshman Corporation have the following current-year income and asset data: The return on investment (ROI) for Investment Center B is:

A) 371.4%
B) 26.9%
C) 24.1%
D) 39.2%
E) 21.7%

F) A) and D)
G) A) and E)

Correct Answer

verified

Show Answer

Question 93

Multiple Choice

Review LaterAdd Note

The type of department that generates revenues and incurs costs, and its manager is responsible for the investments made in operating assets is called a(n) :

No standard rule identifies the best basis of allocating expenses across departments.

Direct expenses are incurred for the joint benefit of more than one department; they cannot be readily traced to only one department.

Using the information below, compute the manufacturing cycle time: $\begin{array}{lrl}\text { Process time } & 6.0 & \text { hours } \\\text { Inspections time } & .5 & \text { hours } \\\text { Move time } & .6 & \text { hours } \\\text { Wait time } & .9 & \text { hours } \\\text { Warehouse storage time } & 72.0& \text { hours }\end{array}$

Departmental salary expenses are direct expenses of that department.

Rent and maintenance expenses would most likely be allocated based on:

Plans that identify costs and expenses under each manager's control prior to the reporting period, typically based on the flexible budget approach, are called:

Pleasant Hills Properties is developing a golf course subdivision that includes 250 home lots; 100 lots are golf course lots and will sell for $95,000 each; 150 are street frontage lots and will sell for $65,000. The developer acquired the land for $1,800,000 and spent another $1,400,000 on street and utilities improvement. Compute the amount of joint cost to be allocated to the street frontage lots using value basis. (Round your intermediate percentages to 2 decimal places.)

A profit center generates revenue, incurs costs, and has the authority to make significant investing decisions.

Sturdivant Fasteners, Co. uses a traditional allocation of overhead based on direct labor hours system. The manager has accumulated the following information on engineering changes, which are indirect cost of their products, for two of the company's major products: $\begin{array} { | l | c | c | } \hline & \begin{array} { c } \text { Automotive } \\\text { Fasteners }\end{array} & \begin{array} { c } \text { Computer } \\\text { Fasteners }\end{array} \\\hline \text { Total units produced } & 5,000 & 2,500 \\\hline \text { Cost per engineering change } & \$ 400 & \$ 400 \\\hline \text { Number of engineering changes } & 5 & 25 \\\hline \text { Direct labor hours per unit } & 4 & 4 \\\hline\end{array}$ Compute the cost per unit using: The traditional two-stage allocation of the costs of engineering changes based on direct labor hours.

Profit center managers are evaluated on their ability to generate revenues in excess of costs.

Profit margin for an investment center measures:

A unit of a business that generates revenues and incurs costs is called a:

With respect to cycle time, companies strive to reduce non-value added time in order to improve ________.

The investment center return on investment is ________ divided by ________.

Evaluation of the performance of an investment center involves only financial measures.

Regardless of the system used in departmental cost analysis:

A firm produces and sells two products, Plus and Max. The following information is available relating to setup costs (a part of factory overhead) : Using number of setups as the activity base, the amount of setup cost allocated to each unit of product for Plus and Max, respectively is: