Accounting chapters 24 and 25
questions with answers.
The responsibility report of Keith Parker, the manager of one of the divisions of an auto parts
manufacturing company, includes profits as well as return on investment and residual income. Keith is
most likely the manager of a(n) ANS -Investment center
When a division is operating at capacity, the transfer price should be ANS -The responsibility report of
Keith Parker, the manager of one of A market-based transfer price
In making product mix decisions under constraining factors, which of the following is the key to choosing
the product type to be maximized? ANS -Contribution margin per unit of the constraint
Which of the following statements is true of performance reporting? ANS -Managers should not be
held accountable for uncontrollable variances
The performance evaluation system should provide incentives to segment managers for coordinating
the activities of the subunits and directing them toward the overall company goal. Which of the
following performance measurement goals has been described by this statement? ANS -Promoting goal
congruence
Which of the following is a disadvantage of decentralization? ANS -it results in problem with achieving
goal congruence
Which of the following is a major consideration when analyzing a special pricing decision? ANS -The
sales price must be high enough to cover any differential costs to fill the order
Gnome Company is deciding whether to continue to manufacture a component or to buy the
component from a supplier. Which of the following is relevant to this decision? ANS -The potential uses
of the facilities that are currently used to manufacture the component
If a business is considering the option of processing its product further, it ignores the _______ ANS -
Cost that is required to produce the basic product before processing further
, Profit center responsibility reports include ANS -Both revenue and expense
In deciding whether to drop its electronics product line, a company's manager should ignore ______
ANS -The amount of unavoidable fixed costs
The balanced scorecard system requires management to consider ANS -Both financial and operational
performance measures
A cost center responsibility report ANS -Typically focuses on the flexible budget variance
Which of the following is the correct formula for calculating return on Investment? ANS -Operating
income/ average total assets
Sales revenue growth, gross margin growth, and return on investment are the key performance
indicators for the ANS -Financial perspective
Companies are price-takers when ANS -They have little or no control over the prices of their products
or services
Which of the following is an advantage of decentralization? ANS -Managers motivation and retention
can be increased by empowering segment managers to make decisions
Differential analysis is a method that ANS -Looks at how operating income would differ under each
decision alternative
Costs that do not differ between alternative are ANS -Considered irrelevant to the decision
Which is not one of the potential advantages of decentralization? ANS -increases goal congruence
The Quaker foods division of PepsiCo is most likely treated as a(n) ANS -investment center
questions with answers.
The responsibility report of Keith Parker, the manager of one of the divisions of an auto parts
manufacturing company, includes profits as well as return on investment and residual income. Keith is
most likely the manager of a(n) ANS -Investment center
When a division is operating at capacity, the transfer price should be ANS -The responsibility report of
Keith Parker, the manager of one of A market-based transfer price
In making product mix decisions under constraining factors, which of the following is the key to choosing
the product type to be maximized? ANS -Contribution margin per unit of the constraint
Which of the following statements is true of performance reporting? ANS -Managers should not be
held accountable for uncontrollable variances
The performance evaluation system should provide incentives to segment managers for coordinating
the activities of the subunits and directing them toward the overall company goal. Which of the
following performance measurement goals has been described by this statement? ANS -Promoting goal
congruence
Which of the following is a disadvantage of decentralization? ANS -it results in problem with achieving
goal congruence
Which of the following is a major consideration when analyzing a special pricing decision? ANS -The
sales price must be high enough to cover any differential costs to fill the order
Gnome Company is deciding whether to continue to manufacture a component or to buy the
component from a supplier. Which of the following is relevant to this decision? ANS -The potential uses
of the facilities that are currently used to manufacture the component
If a business is considering the option of processing its product further, it ignores the _______ ANS -
Cost that is required to produce the basic product before processing further
, Profit center responsibility reports include ANS -Both revenue and expense
In deciding whether to drop its electronics product line, a company's manager should ignore ______
ANS -The amount of unavoidable fixed costs
The balanced scorecard system requires management to consider ANS -Both financial and operational
performance measures
A cost center responsibility report ANS -Typically focuses on the flexible budget variance
Which of the following is the correct formula for calculating return on Investment? ANS -Operating
income/ average total assets
Sales revenue growth, gross margin growth, and return on investment are the key performance
indicators for the ANS -Financial perspective
Companies are price-takers when ANS -They have little or no control over the prices of their products
or services
Which of the following is an advantage of decentralization? ANS -Managers motivation and retention
can be increased by empowering segment managers to make decisions
Differential analysis is a method that ANS -Looks at how operating income would differ under each
decision alternative
Costs that do not differ between alternative are ANS -Considered irrelevant to the decision
Which is not one of the potential advantages of decentralization? ANS -increases goal congruence
The Quaker foods division of PepsiCo is most likely treated as a(n) ANS -investment center
