1) What does the days’ sales in raw materials inventory ratio reveal?
2) The investment center return on investment is ________________ divided by
________.
3) A company rents a small building with 10,000 square feet of space for $100,000 per
year. The rent is allocated to the company’s three departments on the basis of the value
of the space occupied by each. Department One occupies 1,500 square feet of
ground-floor space, Department Two occupies 3,500 square feet of ground-floor space,
and Department Three occupies 5,000 square feet of second-floor space. If rent for
comparable floor space in the neighborhood averages $15.00 per sq. ft. for ground-floor
space and $10.00 per sq. ft. for second-floor space, what annual rent expense should be
charged to each department?
4) A management approach that focuses attention on significant differences from plans
and gives less attention to areas where performance is reasonably close to standards is
known as ___________________.
5) A company’s flexible budget for 30,000 units of production showed sales of $90,000,
variable costs of $36,000, and fixed costs of $23,000. Prepare a flexible budget for
25,000 units assuming it is within the same relevant range of production.
6) On October 31, Augustas Co. received cash dividends of $0.15 per share from its
investment in Lamb Corp.’s common stock. Augustas owned 1,200 shares of Lamb
Corp.’s stock on October 31. The investment is considered available-for-sale. Prepare
the investor’s journal entry to record the receipt of the cash dividends.
7) A partnership designed to protect innocent partners from malpractice or negligence
claims resulting from the acts of other partners is a ________________________
partnership.