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Exam 14: Performance Evaluation for Decentralized Operations

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Question 61

Multiple Choice

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The balanced scorecard measures:

A) only financial information.
B) only nonfinancial information.
C) both financial and nonfinancial information.
D) both external and internal information.

E) All of the above
F) A) and B)

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Question 62

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The best measure of managerial efficiency in the use of investments in assets is:

A) rate of return on stockholders' equity.
B) rate of return on investment.
C) income from operations.
D) inventory turnover.

E) A) and D)
F) B) and D)

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Question 63

Multiple Choice

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Division M for Movism Company has a rate of return on investment of 20% and an investment turnover of 1.5.What is the profit margin?

A centralized business organization is one in which all major planning and operating decisions are made by top management.

A responsibility center in which the department manager has responsibility for and authority over costs and revenues is called a(n) :

Identify the formula for the rate of return on investment.

The three common types of responsibility centers are referred to as asset centers,liabilities centers,and equity centers.

The sales,income from operations,and invested assets for each division of Garner Company are as follows:

Which component of the balanced scorecard evaluates the economic performance of the responsibility centers?

Which of the following is used to measure a manager's performance working in a profit center?

If the profit margin for a division is 8% and the investment turnover is 1.20,the rate of return on investment computed would be 6.7%.

Some organizations use internal service departments to provide services to several divisions or departments within an organization.Which of the following would probably not lend itself as a service department?

The following data are taken from the management accounting reports of Dancer Co.:

Which of the following expenses incurred by the sporting goods department of a department store is a direct expense?

Since transfer prices will affect a division's financial performance,it is used by decentralized segments of a business.

How much would Division B's income from operations increase?

The income from operations for the Southern Division is:

Assume that Division A has generated sales revenue of $4,550,000 and achieved income from operations of $530,000 using $2,800,000 of invested assets.If management desires a minimum rate of return of 15%,the residual income would be:

The profit center income statement should include only those revenues and expenses that can be controlled by the manager.

Personnel administration expense for a department in a store is an indirect expense.