40. Assets invested in a responsibility center are included in a performance report of a:
41. A manager makes a decision that is beneficial for a specific investment center and for the
entire organization. From the organization’s perspective, this decision results in:
42. The controllability concept states that managers should be held responsible for:
43. Relative performance evaluations (RPE) are
not
designed to:
44. Which of the following items would be classified as a fixed compensation item?
45. Which of the following items would
not
be classified as a contingent compensation item?
46. Which of the following statements is (are) true regarding compensation?
(A) Fixed compensation is generally not linked to measured performance; i.e., it is independent of
measured performance.
(B) Properly designed management control systems have contingent compensation items but not
fixed compensation items.
47. The use of dual rates in a cost allocation system assumes that common costs can be:
48. Which of the following statements is (are)
false
regarding the effective use of
management control systems?
(A) In general, single rate cost allocations should not be used in management control systems
because clear control over the cost being allocated cannot be determined.
(B) The primary reason to use a dual rate allocation system is to focus a manager’s performance
evaluation on factors under the manager’s direct control.
49. Examples of pressures that can lead to financial fraud do
not
include:
50. The Sarbanes-Oxley Act of 2002 requires that management of publicly traded companies:
51. Which of the following is not an internal control?
52. Internal controls include all of the following
except
:
53. Boxes-2-Go has two divisions, large and small, that share the common costs of the
company’s communications network. The annual common costs are $4,500,000. You have been
provided with the following information for the upcoming year:
What is the allocation rate for the upcoming year, assuming Boxes-2-Go uses the single-rate
method and allocates common costs based on the number of calls?
54. Boxes-2-Go has two divisions, large and small, that share the common costs of the
company’s communications network. The annual common costs are $4,500,000. You have been
provided with the following information for the upcoming year:
What is the allocation rate for the upcoming, year assuming Boxes-2-Go uses the single-rate
method and allocates common costs based on the time on the network?
55. Boxes-2-Go has two divisions, large and small, that share the common costs of the
company’s communications network. The annual common costs are $4,500,000. You have been
provided with the following information for the upcoming year:
The cost accountant determined $2,700,000 of the communication network’s costs were fixed and
should be allocated based on the number of calls. The remaining costs should be allocated based
on the time on the network. What is the total communication network costs allocated to the Large
Box Division, assuming the company uses dual-rates to allocate common costs?
56. Boxes-2-Go has two divisions, large and small, that share the common costs of the
company’s communications network. The annual common costs are $4,500,000. You have been
provided with the following information for the upcoming year:
The cost accountant determined $2,700,000 of the communication network’s costs were fixed and
should be allocated based on the number of calls. The remaining costs should be allocated based
on the time on the network. What is total communication network costs allocated to the Small Box
Division, assuming the company uses dual-rates to allocate common costs?
57. The Copy Department in the College of Business at State University provides
photocopying service for both the Marketing and Economics Department. The following budget
has been prepared for the year.
If the Copy Department uses a dual rate for allocating its costs based on usage, how much cost
will be allocated to the Marketing Department?
58. The Copy Department in the College of Business at State University provides
photocopying service for both the Marketing and Economics Department. The following budget
has been prepared for the year.
If the Copy Department uses a dual rate for allocating its costs based on usage, how much cost
will be allocated to the Economics Department?
59. The Copy Department in the College of Business at State University provides
photocopying service for both the Marketing and Economics Department. The following budget
has been prepared for the year.
If the Copy Department uses a dual-rate for allocating its costs, how much cost will be allocated
to the Economics Department, assuming the Economics Department actually made 2,100,000
copies during the year?
60. The Copy Department in the College of Business at State University provides
photocopying service for both the Marketing and Economics Department. The following budget
has been prepared for the year.
If the Copy Department uses a dual-rate for allocating its costs, how much cost will be allocated
to the Marketing Department, assuming the Marketing Department actually made 3,000,000
copies during the year?
61. The Copy Department in the College of Business at State University provides
photocopying service for both the Marketing and Economics Department. The following budget
has been prepared for the year.
If the Copy Department uses a dual-rate for allocating its costs, how much cost will be allocated
to the Economics Department, assuming the Economics Department actually made 1,500,000
copies during the year?
62. The Copy Department in the College of Business at State University provides
photocopying service for both the Marketing and Economics Department. The following budget
has been prepared for the year.
If the Copy Department uses a dual-rate for allocating its costs, how much cost will be allocated
to the Marketing Department, assuming the Marketing Department actually made 3,800,000
copies during the year?
63. Fenway Telcom has three divisions, commercial, retail, and consumer, that share the
common costs of the company’s computer server network. The annual common costs are
$2,400,000. You have been provided with the following information for the upcoming year:
What is the allocation rate for the upcoming year, assuming Fenway Telcom uses the single-rate
method and allocates common costs based on the number of connections?
64. Fenway Telcom has three divisions, commercial, retail, and consumer, that share the
common costs of the company’s computer server network. The annual common costs are
$2,400,000. You have been provided with the following information for the upcoming year:
Fenway Telcom uses the single rate method and allocates common costs based on the number of
connections. What is the total computer server network cost allocated to the Commercial
Division?
65. Fenway Telcom has three divisions, commercial, retail, and consumer, that share the
common costs of the company’s computer server network. The annual common costs are
$2,400,000. You have been provided with the following information for the upcoming year:
What is the allocation rate for the upcoming year, assuming Fenway Telcom uses the single-rate
method and allocates common costs based on the time on the network?