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Exam 10: Performance Evalulation

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Question 1

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Describe the four types of responsibility centers. Give a specific example of each of the four types of responsibility centers.

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1. Cost center: In a cost center, manage...

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Question 2

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The Top Hat Division of Blandon's Fine Menswear had the following results last year (in thousands) . Management's target rate of return is 10% and the weighted average cost of capital is 9%. What is the Top Hat Division's sales margin?

A) 280.00%
B) 56.00%
C) 20.00%
D) 6) 90%

E) A) and D)
F) A) and C)

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Question 3

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All favorable variances are investigated when using management by exception.

Responsibility accounting performance reports compare plans (budgets)with actual results in each responsibility center.

The weighted average cost of capital is a component of the Return on Investment (ROI)calculation.

Everyone Deserves to Smile mobile dentist office budgeted for 4335 patient visits a year. Everyone Deserves to Smile actually saw 4435 patients during the year and they have provided the following data: Based on the given information, what is the flexible budget variance for admin expenses?

Davis Corporation manufactures and sells portable radios. The radio sells for $60 per unit and its variable costs per unit are $20. Fixed costs are $52,000 per month for sales volumes up to 30,000 radios. If more than 30,000 radios are sold, the fixed costs will be $40,000. The flexible budget would reflect what monthly operating income for a sales volume of 37,000 radios?

The local Burger King restaurant is likely classified as a revenue center.

Everyone Deserves to Smile mobile dentist office budgeted for 4375 patient visits a year. Everyone Deserves to Smile actually saw 4465 patients during the year and they have provided the following data: Based on the given information, what is the flexible budget variance for revenue?

The ultimate purpose of the balanced scorecard is to give management a balanced, comprehensive view of the company's performance.

The subscription sales manager at The New York Times may be in charge of a(n)

Krazy Kayaks sells its entry-level kayaks for $750 each. Its variable cost is $500 per kayak. Fixed costs are $25,000 per month for volumes up to 1100 kayaks. Above 1100 kayaks, monthly fixed costs are $60,000. What is the budgeted operating income at a level of 2500 kayaks per month?

Total assets is the denominator in the formula managers use to compute ROI.

A potential disadvantage of decentralization is which of the following?

The percentage of products with schematics and detailed operating instructions available within the company's information system for use by customer service representatives may be an example of measuring which perspective of the balanced scorecard?

Small companies tend to use decentralized decision making.

The CEO of Banana Republic, a large division of The Gap, Inc. may be in charge of a(n)

The practice of purchasing other companies within one's supply chain which is predicated on the notion that a company's profits can be maximized by owning one's supplier is known as _______________.

Yellow Hat Company has a sales margin of 10%, a target rate of return of 2.6%, and capital turnover of 2.6. Its operating income is $58,000. The sales in dollars for Yellow Hat Company may be closest to

The accounting department in a convenience store chain is likely classified as a cost center.