Chapter 22 ACG
Company A has a return on investment of 20% and Company B has a return on investment of
24%. Assuming both companies have the same investment center average assets, which of the
following statements is true? - ANS-Company B has higher return on investment than Company
A.
List the sections of a departmental expense allocation spreadsheet with the first section on top.
- ANS-Direct expenses
Indirect expenses
Service department expense
Total expense allocated to operate departments
A manufacturing division has $1,800,000 in average assets and income of $720,000. The
company's target rate is 8%. The division's residual income is $. - ANS-720,000 -(1,800,000 *
8%) = 576,000
A retail store has 10,000 square feet of space and incurs rent costs of $5,000 per month. If
Department A uses 2,000 square feet of space, the amount of rent allocated to the department
will be $. - ANS-1000
Division ABC has $750,000 in average assets and $200,000 in income. Division XYZ has
$800,000 in average assets and $210,000 in income. The company's target rate is 10%. Which
division has the highest residual income? - ANS-Division XYZ with residual income of $130,000.
Which report is more effective in evaluating the performance of profit centers? -
ANS-Departmental contribution to overhead reports
A manufacturing division has an average assets of $1,800,000 and income of $720,000. The
division's return on investment is %. - ANS-40%
A division reports the following figures: Profit margin = 20%; Investment turnover = 0.5. The
division's return on investment is %. - ANS-10%
Division ABC has $750,000 in average assets and income of $200,000. Division XYZ has
$800,000 average assets and income of $210,000. Which of the following statements is true? -
ANS-Division ABC has a higher return on investment.
Company A has a return on investment of 20% and Company B has a return on investment of
24%. Assuming both companies have the same investment center average assets, which of the
following statements is true? - ANS-Company B has higher return on investment than Company
A.
List the sections of a departmental expense allocation spreadsheet with the first section on top.
- ANS-Direct expenses
Indirect expenses
Service department expense
Total expense allocated to operate departments
A manufacturing division has $1,800,000 in average assets and income of $720,000. The
company's target rate is 8%. The division's residual income is $. - ANS-720,000 -(1,800,000 *
8%) = 576,000
A retail store has 10,000 square feet of space and incurs rent costs of $5,000 per month. If
Department A uses 2,000 square feet of space, the amount of rent allocated to the department
will be $. - ANS-1000
Division ABC has $750,000 in average assets and $200,000 in income. Division XYZ has
$800,000 in average assets and $210,000 in income. The company's target rate is 10%. Which
division has the highest residual income? - ANS-Division XYZ with residual income of $130,000.
Which report is more effective in evaluating the performance of profit centers? -
ANS-Departmental contribution to overhead reports
A manufacturing division has an average assets of $1,800,000 and income of $720,000. The
division's return on investment is %. - ANS-40%
A division reports the following figures: Profit margin = 20%; Investment turnover = 0.5. The
division's return on investment is %. - ANS-10%
Division ABC has $750,000 in average assets and income of $200,000. Division XYZ has
$800,000 average assets and income of $210,000. Which of the following statements is true? -
ANS-Division ABC has a higher return on investment.
