Filters
Question type
Study Flashcards

When used in return on investment (ROI) calculations, turnover equals sales divided by average operating assets.

A) True
B) False

Correct Answer

verifed

verified

Oberley Products, Incorporated, has a Receiver Division that manufactures and sells a number of products, including a standard receiver that could be used by another division in the company, the Industrial Products Division, in one of its products. Data concerning that receiver appear below: Oberley Products, Incorporated, has a Receiver Division that manufactures and sells a number of products, including a standard receiver that could be used by another division in the company, the Industrial Products Division, in one of its products. Data concerning that receiver appear below: The Industrial Products Division is currently purchasing 5,000 of these receivers per year from an overseas supplier at a cost of $58 per receiver.What is the maximum price that the Industrial Products Division should be willing to pay for receivers transferred from the Receiver Division? A) $52 per unit B) $19 per unit C) $58 per unit D) $33 per unit The Industrial Products Division is currently purchasing 5,000 of these receivers per year from an overseas supplier at a cost of $58 per receiver.What is the maximum price that the Industrial Products Division should be willing to pay for receivers transferred from the Receiver Division?


A) $52 per unit
B) $19 per unit
C) $58 per unit
D) $33 per unit

E) A) and C)
F) B) and C)

Correct Answer

verifed

verified

The Hum Division of the Ho Company reported the following data for last year: The Hum Division of the Ho Company reported the following data for last year: The return on investment (ROI) last year for the Hum Division was: A) 75% B) 25% C) 35% D) 12% The return on investment (ROI) last year for the Hum Division was:


A) 75%
B) 25%
C) 35%
D) 12%

E) B) and C)
F) B) and D)

Correct Answer

verifed

verified

Zeilinger Products, Incorporated, has a Screen Division that manufactures and sells a number of products, including a standard screen that could be used by another division in the company, the Home Security Division, in one of its products. Data concerning that screen appear below: Zeilinger Products, Incorporated, has a Screen Division that manufactures and sells a number of products, including a standard screen that could be used by another division in the company, the Home Security Division, in one of its products. Data concerning that screen appear below: The Home Security Division is currently purchasing 8,000 of these screens per year from an overseas supplier at a cost of $58 per screen.Assume that the Valve Division is selling all of the valves it can produce to outside customers. From the standpoint of the Valve Division, what is the lost contribution margin if the valves are transferred internally rather than sold to outside customers? A) $88,000 B) $392,000 C) $1,480,000 D) $296,000 The Home Security Division is currently purchasing 8,000 of these screens per year from an overseas supplier at a cost of $58 per screen.Assume that the Valve Division is selling all of the valves it can produce to outside customers. From the standpoint of the Valve Division, what is the lost contribution margin if the valves are transferred internally rather than sold to outside customers?


A) $88,000
B) $392,000
C) $1,480,000
D) $296,000

E) C) and D)
F) B) and D)

Correct Answer

verifed

verified

Godina Products, Incorporated, has a Receiver Division that manufactures and sells a number of products, including a standard receiver that could be used by another division in the company, the Industrial Products Division, in one of its products. Data concerning that receiver appear below: Godina Products, Incorporated, has a Receiver Division that manufactures and sells a number of products, including a standard receiver that could be used by another division in the company, the Industrial Products Division, in one of its products. Data concerning that receiver appear below: The Industrial Products Division is currently purchasing 10,000 of these receivers per year from an overseas supplier at a cost of $81 per receiver. Assume that the Receiver Division is selling all of the receivers it can produce to outside customers. Does there exist a transfer price that would make both the Receiver and Industrial Products Division financially better off than if the Industrial Products Division were to continue buying its receivers from the outside supplier? A) Yes, both divisions are always better off regardless of whether the selling division has enough idle capacity to handle all of the buying division's needs. B) Yes, the minimum transfer price that the selling division should be willing to accept is less than the maximum transfer price that the buying division should be willing to accept. C) The answer cannot be determined from the information that has been provided. D) No, the minimum transfer price that the selling division should be willing to accept exceeds the maximum transfer price that the buying division should be willing to accept. The Industrial Products Division is currently purchasing 10,000 of these receivers per year from an overseas supplier at a cost of $81 per receiver. Assume that the Receiver Division is selling all of the receivers it can produce to outside customers. Does there exist a transfer price that would make both the Receiver and Industrial Products Division financially better off than if the Industrial Products Division were to continue buying its receivers from the outside supplier?


A) Yes, both divisions are always better off regardless of whether the selling division has enough idle capacity to handle all of the buying division's needs.
B) Yes, the minimum transfer price that the selling division should be willing to accept is less than the maximum transfer price that the buying division should be willing to accept.
C) The answer cannot be determined from the information that has been provided.
D) No, the minimum transfer price that the selling division should be willing to accept exceeds the maximum transfer price that the buying division should be willing to accept.

E) A) and B)
F) A) and C)

Correct Answer

verifed

verified

Schabel Corporation has two operating divisions-a Consumer Division and a Commercial Division. The company's Customer Service Department provides services to both divisions. The variable costs of the Customer Service Department are budgeted at $78 per order. The Customer Service Department's fixed costs are budgeted at $270,000 for the year. The fixed costs of the Customer Service Department are determined based on the peak period orders. Schabel Corporation has two operating divisions-a Consumer Division and a Commercial Division. The company's Customer Service Department provides services to both divisions. The variable costs of the Customer Service Department are budgeted at $78 per order. The Customer Service Department's fixed costs are budgeted at $270,000 for the year. The fixed costs of the Customer Service Department are determined based on the peak period orders. At the end of the year, actual Customer Service Department variable costs totaled $483,570 and fixed costs totaled $298,128. The Consumer Division had a total of 2,372 orders and the Commercial Division had a total of 3,703 orders for the year. For performance evaluation purposes, how much actual Customer Service Department cost should NOT be charged to the operating divisions at the end of the year? A) $28,128 B) $37,848 C) $9,720 D) $0 At the end of the year, actual Customer Service Department variable costs totaled $483,570 and fixed costs totaled $298,128. The Consumer Division had a total of 2,372 orders and the Commercial Division had a total of 3,703 orders for the year. For performance evaluation purposes, how much actual Customer Service Department cost should NOT be charged to the operating divisions at the end of the year?


A) $28,128
B) $37,848
C) $9,720
D) $0

E) A) and C)
F) A) and D)

Correct Answer

verifed

verified

Tron Products, Incorporated has a Pump Division that manufactures and sells a number of products, including a standard pump that could be used by another division in the company, the Pool Products Division, in one of its products. Data concerning that pump appear below: Tron Products, Incorporated has a Pump Division that manufactures and sells a number of products, including a standard pump that could be used by another division in the company, the Pool Products Division, in one of its products. Data concerning that pump appear below: The Pool Products Division is currently purchasing 4,000 of these pumps per year from an overseas supplier at a cost of $94 per pump. Assume that the Valve Division is selling all of the valves it can produce to outside customers. Also assume that $3 in variable expenses can be avoided on transfers within the company due to reduced shipping and selling costs. Does there exist a transfer price that would make both the Valve and Pump Division financially better off than if the Pump Division were to continue buying its valves from the outside supplier? A) The answer cannot be determined from the information that has been provided. B) No, the minimum transfer price that the selling division should be willing to accept exceeds the maximum transfer price that the buying division would accept. C) Yes, both divisions are always better off regardless of whether the selling division has enough idle capacity to handle all of the buying division's needs. D) Yes, the minimum transfer price that the selling division should be willing to accept is less than the maximum transfer price that the buying division would accept. The Pool Products Division is currently purchasing 4,000 of these pumps per year from an overseas supplier at a cost of $94 per pump. Assume that the Valve Division is selling all of the valves it can produce to outside customers. Also assume that $3 in variable expenses can be avoided on transfers within the company due to reduced shipping and selling costs. Does there exist a transfer price that would make both the Valve and Pump Division financially better off than if the Pump Division were to continue buying its valves from the outside supplier?


A) The answer cannot be determined from the information that has been provided.
B) No, the minimum transfer price that the selling division should be willing to accept exceeds the maximum transfer price that the buying division would accept.
C) Yes, both divisions are always better off regardless of whether the selling division has enough idle capacity to handle all of the buying division's needs.
D) Yes, the minimum transfer price that the selling division should be willing to accept is less than the maximum transfer price that the buying division would accept.

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

Correct Answer

verifed

verified

Nafth Company has an Equipment Services Department that performs all needed maintenance work on the equipment in the company's Fabrication and Assembly Departments. Costs of the equipment Services Department are charged to the Fabrication and Assembly Departments on the basis of direct labor-hours. Data on direct labor-hours for last year follow: Nafth Company has an Equipment Services Department that performs all needed maintenance work on the equipment in the company's Fabrication and Assembly Departments. Costs of the equipment Services Department are charged to the Fabrication and Assembly Departments on the basis of direct labor-hours. Data on direct labor-hours for last year follow: For the year just ended, the company budgeted its variable maintenance costs at $280,000 for the year. Actual variable maintenance costs for the year totaled $325,000.For performance evaluation purposes, how much of the $325,000 of actual variable maintenance cost should be charged to the Assembly Department at the end of the year just ended? (Do not round your intermediate calculations.) A) $243,117 B) $214,361 C) $206,667 D) $239,474 For the year just ended, the company budgeted its variable maintenance costs at $280,000 for the year. Actual variable maintenance costs for the year totaled $325,000.For performance evaluation purposes, how much of the $325,000 of actual variable maintenance cost should be charged to the Assembly Department at the end of the year just ended? (Do not round your intermediate calculations.)


A) $243,117
B) $214,361
C) $206,667
D) $239,474

E) B) and C)
F) A) and B)

Correct Answer

verifed

verified

Using the formula in the text, if the lowest acceptable transfer price from the viewpoint of the selling division is $75 and the opportunity cost per unit on outside sales is $24, then the variable cost per unit must be:


A) $24 per unit
B) $99 per unit
C) $51 per unit
D) $75 per unit

E) B) and C)
F) A) and C)

Correct Answer

verifed

verified

Ahart Products, Incorporated, has a Transmitter Division that manufactures and sells a number of products, including a standard transmitter that could be used by another division in the company, the Remote Devices Division, in one of its products. Data concerning that transmitter appear below: Ahart Products, Incorporated, has a Transmitter Division that manufactures and sells a number of products, including a standard transmitter that could be used by another division in the company, the Remote Devices Division, in one of its products. Data concerning that transmitter appear below: The Remote Devices Division is currently purchasing 4,000 of these transmitters per year from an overseas supplier at a cost of $59 per transmitter.What is the maximum price that the Remote Devices Division should be willing to pay for transmitters transferred from the Transmitter Division? A) $8 per unit B) $50 per unit C) $59 per unit D) $42 per unit The Remote Devices Division is currently purchasing 4,000 of these transmitters per year from an overseas supplier at a cost of $59 per transmitter.What is the maximum price that the Remote Devices Division should be willing to pay for transmitters transferred from the Transmitter Division?


A) $8 per unit
B) $50 per unit
C) $59 per unit
D) $42 per unit

E) C) and D)
F) B) and C)

Correct Answer

verifed

verified

The basic objective of responsibility accounting is to charge each manager with those costs and/or revenues over which he has control.

A) True
B) False

Correct Answer

verifed

verified

Cirone Incorporated reported the following results from last year's operations: Cirone Incorporated reported the following results from last year's operations: At the beginning of this year, the company has a $1,200,000 investment opportunity with the following characteristics: If the company pursues the investment opportunity and otherwise performs the same as last year, the combined margin for the entire company will be closest to: A) 3.1% B) 8.4% C) 6.3% D) 12.1% At the beginning of this year, the company has a $1,200,000 investment opportunity with the following characteristics: Cirone Incorporated reported the following results from last year's operations: At the beginning of this year, the company has a $1,200,000 investment opportunity with the following characteristics: If the company pursues the investment opportunity and otherwise performs the same as last year, the combined margin for the entire company will be closest to: A) 3.1% B) 8.4% C) 6.3% D) 12.1% If the company pursues the investment opportunity and otherwise performs the same as last year, the combined margin for the entire company will be closest to:


A) 3.1%
B) 8.4%
C) 6.3%
D) 12.1%

E) All of the above
F) None of the above

Correct Answer

verifed

verified

Net operating income is income before interest and taxes.

A) True
B) False

Correct Answer

verifed

verified

Mannerman Products, Incorporated, operates an electric power plant which provides all electrical power for the company's Machining and Fabrication departments. Information on kilowatt-hours (kwh) of power usage in these departments for May follow: Mannerman Products, Incorporated, operates an electric power plant which provides all electrical power for the company's Machining and Fabrication departments. Information on kilowatt-hours (kwh) of power usage in these departments for May follow: The costs of the electric power plant are all fixed. Budgeted fixed costs for May totaled $60,000 and are determined by peak-period requirements. Actual fixed costs for the month totaled $65,000. The Machining Department requires 60% of the peak-period capacity and the Fabrication Department requires 40%.How much (if any) of the electric power plant's actual fixed costs of $65,000 should not be charged to the other departments? A) $0 B) $10,000 C) $5,000 D) $15,000 The costs of the electric power plant are all fixed. Budgeted fixed costs for May totaled $60,000 and are determined by peak-period requirements. Actual fixed costs for the month totaled $65,000. The Machining Department requires 60% of the peak-period capacity and the Fabrication Department requires 40%.How much (if any) of the electric power plant's actual fixed costs of $65,000 should not be charged to the other departments?


A) $0
B) $10,000
C) $5,000
D) $15,000

E) None of the above
F) A) and C)

Correct Answer

verifed

verified

Condren Incorporated reported the following results from last year's operations: Condren Incorporated reported the following results from last year's operations: At the beginning of this year, the company has a $1,000,000 investment opportunity with the following characteristics: If the company pursues the investment opportunity and otherwise performs the same as last year, the combined Return on investment (ROI) for the entire company will be closest to: A) 1.1% B) 8.6% C) 9.7% D) 11.3% At the beginning of this year, the company has a $1,000,000 investment opportunity with the following characteristics: Condren Incorporated reported the following results from last year's operations: At the beginning of this year, the company has a $1,000,000 investment opportunity with the following characteristics: If the company pursues the investment opportunity and otherwise performs the same as last year, the combined Return on investment (ROI) for the entire company will be closest to: A) 1.1% B) 8.6% C) 9.7% D) 11.3% If the company pursues the investment opportunity and otherwise performs the same as last year, the combined Return on investment (ROI) for the entire company will be closest to:


A) 1.1%
B) 8.6%
C) 9.7%
D) 11.3%

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

Correct Answer

verifed

verified

Cabell Products is a division of a major corporation. Last year the division had total sales of $17,540,000, net operating income of $1,438,280, and average operating assets of $4,735,800. The company's minimum required rate of return is 13%.The division's margin is closest to:


A) 8.2%
B) 30.4%
C) 63.1%
D) 27.0%

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

Correct Answer

verifed

verified

Shular Products, Incorporated, has a Valve Division that manufactures and sells a number of products, including a standard valve that could be used by another division, the Division, in one of its products. Data concerning that valve appear below: Shular Products, Incorporated, has a Valve Division that manufactures and sells a number of products, including a standard valve that could be used by another division, the Division, in one of its products. Data concerning that valve appear below: The company has a Pump Division that could use this valve in one of its products. The Pump Division is currently purchasing 8,000 of these valves per year from an overseas supplier at a cost of $47 per valve. Required: a. Assume that the Valve Division has enough idle capacity to handle all of the Pump Division's needs. What is the acceptable range, if any, for the transfer price between the two divisions? b. Assume that the Valve Division is selling all of the valves it can produce to outside customers. Also assume that $5 in variable expenses can be avoided on transfers within the company due to reduced shipping and selling costs. What is the acceptable range, if any, for the transfer price between the two divisions? The company has a Pump Division that could use this valve in one of its products. The Pump Division is currently purchasing 8,000 of these valves per year from an overseas supplier at a cost of $47 per valve. Required: a. Assume that the Valve Division has enough idle capacity to handle all of the Pump Division's needs. What is the acceptable range, if any, for the transfer price between the two divisions? b. Assume that the Valve Division is selling all of the valves it can produce to outside customers. Also assume that $5 in variable expenses can be avoided on transfers within the company due to reduced shipping and selling costs. What is the acceptable range, if any, for the transfer price between the two divisions?

Correct Answer

verifed

verified

a. From the perspective of the selling d...

View Answer

Variable service department costs should be charged to operating departments at the end of the period according to the formula:


A) Budgeted rate × Budgeted activity.
B) Budgeted rate × Actual activity.
C) Actual rate × Actual activity.
D) Budgeted total cost × Percentage of peak-period capacity required.

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

Correct Answer

verifed

verified

Fyodor Corporation has a Parts Division that does work for other Divisions in the company as well as for outside customers. The company's Machine Division has asked the Parts Division to provide it with 10,800 special parts each year. The special parts would require $45 per unit in variable production costs. The Machine Division has a bid from an outside supplier for the special parts at $63.60 per unit. In order to have time and space to produce the special part, the Parts Division would have to cut back production of another part-the QR4 that it presently is producing. The QR4 sells for $88 per unit, and requires $44 per unit in variable production costs. Packaging and shipping costs of the QR4 are $2 per unit. Packaging and shipping costs for the new special part would be only $0.50 per unit. The Parts Division is now producing and selling 54,000 units of the QR4 each year. Production and sales of the QR4 would drop by 5% if the new special part is produced for the Machine Division.Required:a. What is the range of transfer prices within which both the Divisions' profits would increase as a result of agreeing to the transfer of 10,800 special parts per year from the Parts Division to the Machine Division? (Round your final answers to 2 decimal places.)b. Is it in the best interests of Fyodor Corporation for this transfer to take place?

Correct Answer

verifed

verified

a. From the perspective of the Parts Div...

View Answer

Steinhoff Products, Incorporated, has a Sensor Division that manufactures and sells a number of products, including a standard sensor that could be used by another division in the company, the Safety Products Division, in one of its products. Data concerning that sensor appear below: Steinhoff Products, Incorporated, has a Sensor Division that manufactures and sells a number of products, including a standard sensor that could be used by another division in the company, the Safety Products Division, in one of its products. Data concerning that sensor appear below: The Safety Products Division is currently purchasing 4,000 of these sensors per year from an overseas supplier at a cost of $48 per sensor.What is the maximum price that the Safety Products Division should be willing to pay for sensors transferred from the Sensor Division? A) $51 per unit B) $37 per unit C) $48 per unit D) $14 per unit The Safety Products Division is currently purchasing 4,000 of these sensors per year from an overseas supplier at a cost of $48 per sensor.What is the maximum price that the Safety Products Division should be willing to pay for sensors transferred from the Sensor Division?


A) $51 per unit
B) $37 per unit
C) $48 per unit
D) $14 per unit

E) B) and D)
F) C) and D)

Correct Answer

verifed

verified

Showing 161 - 180 of 335

Related Exams

Exam 1

Managerial Accounting and Cost Concepts

346 Questions

Exam 2

Job-Order Costing: Calculating Unit Product Costs

408 Questions

Exam 3

Job-Order Costing: Cost Flows and External Reporting

314 Questions

Exam 4

Process Costing

365 Questions

Exam 5

Cost-Volume-Profit Relationships

396 Questions

Exam 6

Variable Costing and Segment Reporting: Tools for Management

392 Questions

Exam 7

Activity-Based Costing: a Tool to Aid Decision Making

382 Questions

Exam 8

Master Budgeting

284 Questions

Exam 9

Flexible Budgets and Performance Analysis

491 Questions

Exam 10

Standard Costs and Variances

469 Questions

Exam 12

Strategic Performance Measurement

153 Questions

Exam 13

Differential Analysis: the Key to Decision Making

432 Questions

Exam 14

Capital Budgeting Decisions

405 Questions

Exam 15

Statement of Cash Flows

221 Questions

Exam 16

Financial Statement Analysis

327 Questions

Show Answer