Homework Answers
17.d.Managers should be responsible for both revenues and costs
18.Margin = Operating Income/Sales
= 1,000,000/5,000,000
= 20%
C.
19.Turnover = Sales/Total Assets
= 5,000,000/10,000,000
= 0.5
i.e. 50%
D
24.Net Effect on income = Increase in contribution margin – additional expense
= 600,000*25% - 30,000
= $120,000
i.e. C
25.a.Full Costing
26.Direct Costing
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"Responsibility accounting" is the concept that says: 17. Managers should be held entirely responsible for all...
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24. ABC Company sells a variety of drink and food products including potato chips and sodas The segmented income statements for these two products (profit centers) are as follows: Sales Variable costs Contribution margin Directly traceable fixed costs Segment margin Allocated (equally) common fixed costs Net income Total $1,700,000 515,000 1,185,000 280,000 905,000 200.000 $705,000 Soda $800,000 200,000 600,000 120,000 480,000 100.000 $380,000 Chip $900,000 315,000 585,000 160.000 425,000 100,000 $325,000 ABC Company's management is considering a special advertising campaign...
QUESTION 1 Responsibility accounting is a system in which a manager is held responsible for those...
QUESTION 1 Responsibility accounting is a system in which a manager is held responsible for those items of revenues and costs-and only those items-that the manager can control to a significant extent. O True O False QUESTION 2 The sales volume in units that are needed to achieve a specific Target Profit can be calculated by Dividing the dollars of fixed costs by the unit contribution margin Dividing the dollars of fixed costs and target profit by the unit contribution...
All other things equal, if a division's traceable fixed expenses increase: A) the division's segment margin...
All other things equal, if a division's traceable fixed expenses increase: A) the division's segment margin will increase. B) the overall company net operating income will decrease. C) the division's contribution margin will decrease. D) the division's sales volume will increase.
1. Managers in a cost center are held responsible for both the costs and volumes of...
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please answer all 4 multiple choice questions A responsibility center in which a manager is responsible...
please answer all 4 multiple choice questions
A responsibility center in which a manager is responsible for revenues, cost, and investment is an) cost center. revenue center profit center. investment center None of these. If the accounts receivable turnover is 42 days, what is the account receivable turnover ratio (assuming a 365 day year)? 7.14 times 8.69 times 4.52 times None of these When 10,000 units are produced, variable costs are $6 per unit. Therefore, when 20,000 units are produced:...
Responsibility accounting revolves around the concept that Multiple Choice A. someone has to be made responsible...
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Exercise 7-17 Working with a Segmented Income Statement (L07-4) Raner, Harris & Chan is a consulting...
Exercise 7-17 Working with a Segmented Income Statement (L07-4) Raner, Harris & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices-one in Chicago and one in Minneapolis. The firm classifies the direct costs of consulting jobs as variable costs. A contribution format segmented Income statement for the company's most recent year is given Assume that Minneapolis' sales by major market are: Sales Variable expenses Contribution margin Traceable fixed expenses...
Shown as follows are responsibility income statements for Butterfield, Inc., for the month of March. Sales...
Shown as follows are responsibility income statements for Butterfield, Inc., for the month of March. Sales Variable costs Contribution margin Fixed costs traceable to divisions Division responsibility margin Common fixed costs Income from operations 30 Investment Centers Butterfield, Inc Division 1 Dollars % Dollars % $ 470,000 100.00% $ 350,000 100% 246,000 52.34 210,000 6 0 $ 224,000 47.66% $ 140,000 40% 131,100 27.89 7 3,500 21 $ 92,900 19.77% $ 66,500 19% 40,000 8.51 $ 52,900 11.26% Division 2...
Exercise 6-17 Working with a Segmented Income Statement [LO6-4] Raner, Harris, & Chan is a consulting...
Exercise 6-17 Working with a Segmented Income Statement [LO6-4] Raner, Harris, & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices—one in Chicago and one in Minneapolis. The firm classifies the direct costs of consulting jobs as variable costs. Assume that Minneapolis’ sales by major market are: Market Minneapolis Medical Dental Sales $ 450,000 100 % $ 300,000 100 % $ 150,000 100 % Variable expenses 270,000...
A segment margin: Select one: a. All of the choices b. is calculated by deducting fixed...
A segment margin: Select one: a. All of the choices b. is calculated by deducting fixed costs that are traceable to the particular segment from the segment's contribution margin. c. is the amount of operating income generated by subunit. d. is calculated as sales less variable costs less traceable fixed costs.
24. ABC Company sells a variety of drink and food products including potato chips and sodas The segmented income statements for these two products (profit centers) are as follows: Sales Variable costs Contribution margin Directly traceable fixed costs Segment margin Allocated (equally) common fixed costs Net income Total $1,700,000 515,000 1,185,000 280,000 905,000 200.000 $705,000 Soda $800,000 200,000 600,000 120,000 480,000 100.000 $380,000 Chip $900,000 315,000 585,000 160.000 425,000 100,000 $325,000 ABC Company's management is considering a special advertising campaign...
QUESTION 1 Responsibility accounting is a system in which a manager is held responsible for those items of revenues and costs-and only those items-that the manager can control to a significant extent. O True O False QUESTION 2 The sales volume in units that are needed to achieve a specific Target Profit can be calculated by Dividing the dollars of fixed costs by the unit contribution margin Dividing the dollars of fixed costs and target profit by the unit contribution...
please answer all 4 multiple choice questions
A responsibility center in which a manager is responsible for revenues, cost, and investment is an) cost center. revenue center profit center. investment center None of these. If the accounts receivable turnover is 42 days, what is the account receivable turnover ratio (assuming a 365 day year)? 7.14 times 8.69 times 4.52 times None of these When 10,000 units are produced, variable costs are $6 per unit. Therefore, when 20,000 units are produced:...
Exercise 7-17 Working with a Segmented Income Statement (L07-4) Raner, Harris & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices-one in Chicago and one in Minneapolis. The firm classifies the direct costs of consulting jobs as variable costs. A contribution format segmented Income statement for the company's most recent year is given Assume that Minneapolis' sales by major market are: Sales Variable expenses Contribution margin Traceable fixed expenses...
Shown as follows are responsibility income statements for Butterfield, Inc., for the month of March. Sales Variable costs Contribution margin Fixed costs traceable to divisions Division responsibility margin Common fixed costs Income from operations 30 Investment Centers Butterfield, Inc Division 1 Dollars % Dollars % $ 470,000 100.00% $ 350,000 100% 246,000 52.34 210,000 6 0 $ 224,000 47.66% $ 140,000 40% 131,100 27.89 7 3,500 21 $ 92,900 19.77% $ 66,500 19% 40,000 8.51 $ 52,900 11.26% Division 2...
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