FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 23: Evaluating Decentralized Operations

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 61

Multiple Choice

Review LaterAdd Note

Review Later

The income from operations for the Rails Division is

A) $60,800
B) $33,600
C) $8,700
D) $21,150

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

Correct Answer

verified

Show Answer

Question 62

True/False

Review LaterAdd Note

Review Later

The profit margin component of rate of return on investment analysis focuses on profitability by indicating the rate of profit earned on each sales dollar.

A) True
B) False

Correct Answer

verified

Show Answer

Question 63

True/False

Review LaterAdd Note

The primary disadvantage of decentralized operations is that decisions made by one manager may affect other managers in such a way that the profitability of the entire company may suffer.

The major advantage of the rate of return on investment over income from operations as a divisional performance measure is that divisional investment is directly considered and thus comparability of divisions is facilitated.

Under the cost price approach,the transfer price is the price at which the product or service transferred could be sold to outside buyers.

The investment turnover for Mason is

A responsibility center in which the department manager has responsibility for and authority over costs,revenues,and assets invested in the department is termed a cost center.

Marshall Corporation had $220,000 in invested assets,sales of $242,000,income from operations of $66,000,and a desired minimum rate of return of 3%.The rate of return on investment for Marshall is

Businesses that are separated into two or more manageable units in which managers have authority and responsibility for operations are said to be

Purchase requisitions for Purchasing and the number of payroll checks for Payroll Accounting are examples of activity bases.

In evaluating the profit center manager,the income from operations should be compared

Most manufacturing plants are considered cost centers because they have control over

A responsibility center in which the department manager is responsible for costs,revenues,and assets for a department is called:

The minimum accepted divisional income from operations is set by top management by establishing a maximum rate of return considered acceptable for invested assets.

To calculate income from operations,total service department charges are

Which of the following would be most effective in a small owner / manager-operated business?

The income from operations for the Locomotive Division is

The ratio of income from operations to sales,which is also a factor in the DuPont formula for determining the rate of return on investment,is called

​The Nelson Company's radio division currently is purchasing transistors from the Charlotte Co.for $3.50 each.The total number of transistors needed is 8,000 per month.Nelson Company's electronics division can produce the transistors for a cost of $4.00 each and they have plenty of capacity to manufacture the units.The $4 is made up of $3.25 in variable costs,and $0.75 in allocated fixed costs.What should be the range of a possible transfer price?

One of the advantages of decentralization is that delegating authority to managers closest to the operation always​ results in better decisions.