Homework Answers
Question 19
Answer : False
The Basic Objective of Responsibility Accounting is to charge each manager with those cost over which he has control.
Question 20
Answer:
A segment of business responsible for both revenues and expenses are called profit center.
Question 21
Answer : False
A profit center is a business segment whose manager has control over costs, revenues but has no control over investment in operating assets.
Question 22
Answer :
Residual Income is the net operating income earned above a certain minimum required return on average operating assets.
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QUESTION 19 The basic objective of responsibility accounting is to charge each manager with those costs...
UUTINI ate.. QUESTION 16 A responsibility center in which the authority over and responsibility for costs...
UUTINI ate.. QUESTION 16 A responsibility center in which the authority over and responsibility for costs and revenues is vested in the department manager is termed a profit center. True False QUESTION 17 The minimum amount of desired divisional income from operations is set by top management by establishing a minimum rate of return considered acceptable for invested assets. True False QUESTION 18 Service department charges are similar to the expenses of a profit center that purchased services from a...
The responsibility center in which the manager has responsibility and authority over revenues and costs, but...
The responsibility center in which the manager has responsibility and authority over revenues and costs, but not assets, is the Multiple Choice revenue center investment center, profit center. cost center The minimum required rate of return for a project is the: Multiple Choice Ο accounting rate of return. Ο hurdle rate. Ο annual rate of return. Ο internal rate of return.
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...
QUESTION 29 A company is analyzing the performance of responsibility centers. Controllable costs would be included...
QUESTION 29 A company is analyzing the performance of responsibility centers. Controllable costs would be included in the performance reports of which of the following types of responsibility centers? Profit Centers No Yes Yes No Investment centers No A) B) C) D) Yes Yes A) ОВ) o C) o D) QUESTION 30 Profit center managers are often evaluated using return on investment (ROl) or residual income measures. O True False QUESTION 31 An opportunity cost is the potential benefit that...
41. At the end of the fiscal year, variances from standard costs are usually transferred to...
41. At the end of the fiscal year, variances from standard costs are usually transferred to the a.factory overhead account b.direct labor account c.direct materials account d.cost of goods sold account 42. Separation of businesses into more manageable operating units is termed decentralization. True False 43. A decentralized business organization is one in which all major planning and operating decisions are made by top management. True False 44. The profit center income statement should include only revenues and expenses that...
QUESTION 12 Three measures of investment center performance are income from operations, rate of return on...
QUESTION 12 Three measures of investment center performance are income from operations, rate of return on investment, and residual income. True False QUESTION 13 If divisional income from operations is $100,000, invested assets are $850,000, and the minimum rate of return on invested assets is 8%, the residual income is $68,000. True False QUESTION 14 A decentralized business organization is one in which all major planning and operating decisions are made by top management True False QUESTION 15 Click Save...
Which responsibility centers generate both revenues and costs? Question 20 options: Investment and profit centers Profit...
Which responsibility centers generate both revenues and costs? Question 20 options: Investment and profit centers Profit and cost centers Cost and investment centers Only profit centers A profit center is Question 21 options: a responsibility center that always reports a profit. a responsibility center that incurs costs and generates revenues. evaluated by the rate of return earned on the investment allocated to the center. referred to as a loss center when operations do not meet the company's objectives.
Mastery Problem: Return on Investment, margin, and turnover Return on Investment (ROI) The manager of an...
Mastery Problem: Return on Investment, margin, and turnover Return on Investment (ROI) The manager of an investment center should be evaluated based on revenues, costs, and investments. An evaluation based on net income ignores the amount of investment the investment center required. One way to measure operating profit in relation to investment is a calculation called the return on investment. One formula for calculating return on investment is: Operating income Invested Assets ROI is effective because it takes into consideration...
True or False 1.A profit center is an organizational segment in which the manager is responsible...
True or False 1.A profit center is an organizational segment in which the manager is responsible for costs and revenues, but not investments in assets. 2.Operating assets would include office buildings leased to other companies. 3.Residual income is the portion of income produced by the division that is not related to its daily activities. 4.Although economic value added (EVA) is similar to residual income, adjustments are made to the financial information to better reflect the economic results of the division....
5. Which of the following would be classified as an internal failure cost on a quality...
5. Which of the following would be classified as an internal failure cost on a quality cost report? A Supervision of testing and inspection activities B. Re-entering data because of keying errors C. Cost of field servicing and handling complaints D. Depreciation of test equipment 6. Which of the following would be classified as an external failure cost on a quality cost report? A Net cost of scrap B Product recalls C Rework labor and overhead D. Downtime caused by...
UUTINI ate.. QUESTION 16 A responsibility center in which the authority over and responsibility for costs and revenues is vested in the department manager is termed a profit center. True False QUESTION 17 The minimum amount of desired divisional income from operations is set by top management by establishing a minimum rate of return considered acceptable for invested assets. True False QUESTION 18 Service department charges are similar to the expenses of a profit center that purchased services from a...
The responsibility center in which the manager has responsibility and authority over revenues and costs, but not assets, is the Multiple Choice revenue center investment center, profit center. cost center The minimum required rate of return for a project is the: Multiple Choice Ο accounting rate of return. Ο hurdle rate. Ο annual rate of return. Ο internal rate of return.
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...
QUESTION 29 A company is analyzing the performance of responsibility centers. Controllable costs would be included in the performance reports of which of the following types of responsibility centers? Profit Centers No Yes Yes No Investment centers No A) B) C) D) Yes Yes A) ОВ) o C) o D) QUESTION 30 Profit center managers are often evaluated using return on investment (ROl) or residual income measures. O True False QUESTION 31 An opportunity cost is the potential benefit that...
QUESTION 12 Three measures of investment center performance are income from operations, rate of return on investment, and residual income. True False QUESTION 13 If divisional income from operations is $100,000, invested assets are $850,000, and the minimum rate of return on invested assets is 8%, the residual income is $68,000. True False QUESTION 14 A decentralized business organization is one in which all major planning and operating decisions are made by top management True False QUESTION 15 Click Save...
5. Which of the following would be classified as an internal failure cost on a quality cost report? A Supervision of testing and inspection activities B. Re-entering data because of keying errors C. Cost of field servicing and handling complaints D. Depreciation of test equipment 6. Which of the following would be classified as an external failure cost on a quality cost report? A Net cost of scrap B Product recalls C Rework labor and overhead D. Downtime caused by...
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H0:μ=56.9
H1:μ<56.9
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