Breton Corporation ‘s Longboat division ‘s segment margin as a percentage of net sales
is 12% for the current reporting period. The division has net sales revenue of
$2,500,000. Operating assets were $800,000 at the beginning of the period and
$1,200,000 at the end. What is the division ‘s ROI?
a. 10%
b. 12%
c. 15%
d. 30%
Which of the following laws prohibits companies from engaging in price
discrimination?
a. Sarbanes-Oxley Act of 2002
b. Robinson-Patman Act of 1936
c. The Securities Act of 1933
d. NAFTA
Which of the following is not a component of the master budget?
a. Indirect cost budget
b. Direct material purchases budget
c. Ending inventory and cost of goods sold budget
d. All of these answer choices are components of the master budget.
The steps involved in building a balanced scorecard are
a. Selecting measures, setting targets for measures and adjusting the scorecard as
strategies change.
b. Selecting measures, setting targets for measures and changing objectives that do not
meet scorecard measures.
c. Setting targets for measures, adjusting objectives to meet the scorecard, and
eliminating processes that do not meet objectives.
d. None of these answer choices are correct.
Assume a sales price per unit of $25, variable cost per unit $15, and total fixed costs of
$18,000. What is the breakeven point in units?
a. 720 units
b. 1,200 units
c. 1,800 units
d. None of these answer choices is correct.
Ans: c
Ruhlen Corporation ‘s Small Craft division reported a net operating loss of $2,300,000
in the most recent reporting period. The division absorbed common fixed corporate
expenses of $2,500,000. The division ‘s segment margin is
a. $(2,500,000).
b. $(2,300,000).
c. $200,000.
d. $4,800,000.
Which of the following capital assets is not a depreciable asset?
a. Building
b. Equipment
c. Automobiles
d. Land
Which of the following is not a reason variable overhead costs might differ from the
flexible budget costs?
a. Executives’ salaries may increase or decrease.
b. The prices paid to acquire variable overhead items can increase or decrease.
c. Variable overhead items can be used more or less efficiently than planned.
d. Since variable overhead varies with production activity, if the company is less
efficient with respect to that production activity, then variable overhead will be used
more or less efficiently.
Which of the following organizations would not benefit from benchmarking?
a. Equipment manufacturer.
b. Law firm.
c. Community college.
d. All of these answer choices are correct.
If managers want to increase ROI, an increase in sales revenue will increase
a. Margin.
b. Asset turnover.
c. Both margin and asset turnover.
d. Neither margin nor asset turnover.
Which of the following is not a weakness of the accounting rate of return?
a. It does not consider cash flows
b. It does not consider the time value of money
c. The discount rate used in the calculation may change over the life of the investment
d. All of these answer choices are weaknesses of the accounting rate of return
Managerial accounting is designed to assist managers with which of the following
activities?
a.Planning
b.Controlling
c.Evaluating
d.All of these answer choices are correct
Jeffery Hospital Equipment Manufacturing Company produces high-technology
equipment used to monitor brain activity. In preparing the current budget, Jeffery’s
management chooses to use an overhead base of machine hours. Jeffery estimates a
total of $750,000 in manufacturing overhead costs and 15,000 machine hours for the
coming year. In December, Jeffery’s controller reported actual manufacturing overhead
incurred of $820,000 and 15,300 machine hours used during the year.
a. What is Jeffery’s predetermined overhead rate for the year?
b. How much manufacturing overhead did Jeffery apply during the period?
Direct materials variances, direct labor variances, return on investment, residual income
and EVA are performance measures that are
Cooper Company, a retailer of camping supplies has budgeted activity for January using
the following data:
Required:
What is Cooper ‘s budgeted cash receipts for January?
An investment center manager ‘s performance is typically measured based on the unit ‘s
overall profit compared to the flexible budget.
As long as EVA is positive, the firm ‘s managers have used the invested capital to create
additional value for shareholders.
When using the indirect method, the calculation of cash flows provided by operating
activities begins with net income.
Required:
Indicate whether the following items are added or deducted from net income to arrive at
cash flow from operating activities.
Determine the qualitative and quantitative impacts of outsourcing decisions.