Question

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 are controlled by the manager.

True

False

45.

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 direct operating expenses.

True

False

46.

If income from operations for a division is $5,000, invested assets are $25,000, and sales are $30,000, the profit margin is 20%.

True

False

47.

In evaluating the profit center manager, the income from operations should be compared

a.to historical performance or budget

b.to the total company earnings per share

c.across profit centers

d.to the competitor's net income

48.

The following financial information was summarized from the accounting records of Train Corporation for the current year ended December 31:

	Rails Division		Locomotive Division		Corporate Total
Cost of goods sold	$ 47,200		$30,720
Direct operating expenses	27,200		20,040
Sales	108,000		78,000
Interest expense					$ 2,040
General overhead					18,160
Income tax					4,700

The income from operations for the Rails Division is

a.$60,800

b.$33,600

c.$21,150

d.$8,700

49.

Chicks Corporation had $1,100,000 in invested assets, sales of $1,210,000, income from operations amounting to $302,500, and a desired minimum rate of return of 15%.

The profit margin for Chicks is

a.22%

b.15%

c.27.5%

d.25%

50.

The balanced scorecard measures

a.external and internal information

b.only financial information

c.both financial and nonfinancial information

d.only nonfinancial information

51.

Standard cost variances are usually not reported in reports to stockholders.

True

False

52.

If Division Q's yearly income from operations was $30,000 on invested assets of $200,000, the rate of return on investment is 15%.

True

False

Answer 1

	41)	option d
		cost of goods sold account
	42)	TRUE
	43)	FALSE
	44)	TRUE
	45)	TRUE
	46)	profit margin
		5000/30,000
		17%
		FALSE
	47)	option a
		to historical performance or budget
	48)	108000-47200-27200
		33600
		option B
	49)	profit margin
		302500/1210,000
		25%
		option d
	50)	option c
		both financial and non financial information
	51)	TRUE
	52)	30,000/200,000
		0.15
		TRUE