On a balanced scorecard, the measure of the product returns as percentage of sales
would most likely be an example of a performance measure in the:
A.financial dimension
B.customer dimension
C.internal business process dimension
D.learning and growth dimension
Correll Company
Correll Company has two divisions, A and B. Information for each division is as
follows:
Refer to Correll Company. What is the return on investment for A?
A.18%
B.15%
C.20%
D.40%
Engine Division
The Engine Division provides engines for the Tractor Division of a company. The
standard unit costs for Engine Division are as follows:
Refer to the Engine Division. What is the transfer price based on variable product costs
plus a fixed fee of $210?
A.$210.
B.$1,800.
C.$2,100
D.$2,310.
Safa Visual Works, Inc. estimated its overhead costs for the current year to be as
follows: fixed, $175,000; variable, $4 per unit. Safa expected to produce 350,000 units
during the year. During the year, the company incurred overhead costs of $1,600,000
and produced 400,000 units. Calculate the rate to be used to apply manufacturing
overhead costs to products.
A.$3.50
B.$4.50
C.$5.50
D.$9.00
Just-in-time inventory is a method of managing purchasing, production, and sales, by
which
A.the firm attempts to produce each item only as needed for the next step in the
production process.
B.the firm attempts to time purchases so that items arrive just in time for sale or
production.
C.the firm attempts to produce each item only as needed for the next step in the
production process, and the firm attempts to time purchases so that items arrive just in
time for sale or production.
D.None of the answers is correct.
Ambros Company
In the Ambros Company, Division A has a product that can be sold either to outside
customers or to Division B. Information about these divisions is given below:
Refer to Ambros Company. The company uses the opportunity cost approach to transfer
pricing. What is the minimum transfer price in Case 2?
A.$75.
B.$74.
C.$68.
D.$58.
Which of these is considered to be a key concept in fraudulent financial reporting?
A.the conduct must be unintentional or not reckless.
B.the misstatement must be immaterial to the financial statements.
C.employees at all levels in the organization could be involved in fraudulent financial
reporting.
D.All of the answers are correct.
What is a disadvantage for companies to award managerial performance based on a
subjective approach?
A.The subjective approach considers factors not explicitly captured in the formula
approach.
B.The subjective approach is subject to favoritism, political maneuvering, and a “good
old boy network.”
C.Managers who do not fully trust their superiors tend to prefer this approach.
D.All of the answers are correct.
Marlow Company
The following information pertains to the three divisions of Marlow Company:
Refer to Marlow Company. What is the investment in Division Y?
A.$25,000
B.$125,000
C.$500,000
D.$208,333
Which of the following is not a valid assumption for cost-volume-profit analysis?
A.Variable costs per unit are not affected by changes in the rate of production.
B.An increase in fixed costs will cause the break-even point to rise.
C.Demand is constant regardless of price.
D.A decrease in variable cost per unit will lower the break-even point.
A shortcoming of return on investment (ROI) is that it may not lead managers to accept
good investment opportunities if
A.ROI of the investment is higher than the present ROI of the division.
B.the ROI of the investment is the same as the present ROI of the division.
C.the ROI of the investment is lower than the present ROI of the division.
D.None of the answers is correct.
Resources used versus resources supplied. Here is information about resources for
Health Unlimited, which produces publications for various health food companies:
Required:
a. Compute unused capacity for these items.
b. Management wants no more than 20 percent of total costs to be incurred for unused
capacity. How well is Health Unlimited doing?
Assume a normal costing system. Calculate the predetermined overhead rate based on
the following assumptions:
A.$8.33 per machine hour
B.$8.50 per machine hour
C.$7.50 per machine hour
D.$9.44 per machine hour
Which focuses on increasing the excess of differential revenue over differential costs
when the firm faces bottlenecks?
A.Differential income analysis
B.Throughput analysis
C.Theory of bottlenecks
D.Theory of constraints