Final exam Flashcards
(20 cards)
responsibility accounting is defined as a system that
a. Measures the result of each responsibility center and comparison results with some measure of expected or budgeted outcome.
b. Measure the results of the manager, responsible for revenues and costs.
c. Measures actual results against a flexible budget.
d. Measures responsibility by functionally.
a. Measures the results of each responsibility center and compares those results with some measure of expected and budgeted outcome.
A manufacturing division of a company would most likely be evaluated as a
a. Asset center.
b. Investment center.
c. Revenue center.
d. Cost center.
d. Cost center.
which of the following departments is likely to be an investment center?
a. Accounting department.
b. Personnel department.
c. Machining department.
d. Food products division
d. Food products division.
both revenue center and profit center managers are responsible for achieving
a. But you did not income.
b. Budget costs.
c. Budgeted revenues
d. Budgeted contribution margin.
c. Budgeted revenue.
which of the following departments in a retail organization selling auto parts as a profit center?
a. Automotive parts department.
b. Administration department.
c. Marketing department.
d. Accounting department.
a. Automotive parts department.
which of the following responsibility centers would have a manager, responsible for revenues, costs, and investments?
a. Investment center.
b. Profit center.
c. Expense center.
d. Cost center.
a. Investment center.
The manager of a profit center is responsible for
a. Decisions regarding revenue generation.
b. Both delivering a quality product or service at a reasonable, but minimal cost and decision decisions regarding revenue generation.
c. Delivering your quality product or service at reasonable, but minimal cost.
d. Decisions to invest in Equipment.
b. Both still a quality product or service at reasonable, but minimal cost and decisions regarding revenue generation.
an example of an investment center is
a. The marketing department.
b. A company.
c. The credit department.
d. A production department.
b. A company.
The delegation of decision-making authority to successively lower management levels in an organization is called
a. An unfavorable overhead variance.
b. Centralization.
c. Optimization.
d. Decentralization.
d. Decentralization.
when top management controls the major functions of an organization, it is called
a. Decentralization.
b. Optimization.
c. Centralization.
d. And unfavorable overhead variance.
c. Centralization.
which of the following is not a disadvantage of the ROI performance measure?
a. It encourages myopic behavior.
b. It encourages managers to focus on the long run rather than the short run
c. It discourage managers from investing in projects that would decrease divisional ROI, but increase the probability of the company is a whole.
d. All of these choices are correct.
b. And encourages managers to focus on a long run rather than the short run.
The after tax operating profit minus the total annual cost of capital equals the
a. Net income.
b. ROI.
c. EVA.
d. Residual income.
c. EVA.
which of the following statements is true of economic value added (EVA)
a. It is the difference between operating income and operating assets.
b. It typically uses a minimum expected rate of return
c. It emphasizes after tax operating income in actual cost of capital
d. It includes all assets used to generate operating income.
c. It emphasizes after tax operating income and actual cost of capital
transfer prices of the price is charged
a. When delivering goods to the customer.
b. For the goods produced by one division to another division that needs these goods.
c. For distributing goods from one warehouse to the other.
d. When transferring goods to international divisions
b. for the goods produced by one division to another division that needs these goods.
The transfer price that would leave the ceiling division know worse off if the good is sold to an internal division is called
a. The minimum transfer price.
b. The maximum transfer price.
c. The negotiated transfer price.
d. Both the maximum transfer price in the minimum transfer price.
a. The minimum transfer price.
The transfer price that would leave the bind division no worse off if an input is purchased from an internal division is called
a. The minimum transfer price.
b. Both the maximum transfer price and the negotiated transfer price.
c. The maximum transfer price.
d. The negotiated transfer price.
c. The maximum transfer price.
When there is an outside market for an intermediate product is perfectly competitive the most equitable method of transfer pricing is
a. Product cost pricing.
b. Market price.
c. Cost plus markup pricing.
d. Variable cost pricing.
b. Market price.
The transfer price that would leave the buying division know where an input is purchased from an internal division is called
a. Margin.
b. Ceiling.
c. Floor.
d. Mark up.
b. Ceiling.
The “ floor” and transfer pricing is
a. The transfer price that would leave the buying division no worse off if an input is purchased from an internal division.
b. The transfer price I would leave the buying division worse off if an output is purchased from an internal division.
c. The transfer price I will leave the selling division no worse off if the good is sold to an internal division.
d. None of these choices are correct.
c. The transfer price that would leave the selling division know worse off if the good is sold to an internal division.
The manager of a cost center is responsible for
a. Decisions regarding costs.
b. Both decisions regarding cost and decisions regarding revenues.
c. Decisions to invest in assets.
d. Decision decisions regarding revenues.
a. Decisions regarding costs.
