FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 11: Segment Reporting,decentralization,and the Balanced Scorecard

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 31

Multiple Choice

Review LaterAdd Note

Review Later

Delmar Corporation is considering the use of residual income as a measure of the performance of its divisions.What major disadvantage of this method should the company consider before deciding to institute it?

A) this method does not take into account differences in the size of divisions.
B) investments may be adopted that will decrease the overall return on investment.
C) the minimum required rate of return may eliminate desirable investments.
D) residual income does not measure how effectively the division manager controls costs.

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

Correct Answer

verified

Show Answer

Question 32

Multiple Choice

Review LaterAdd Note

Review Later

The Axle Division of LaBate Company makes and sells only one product.Annual data on the Axle Division's single product follow: -If Axle sells 16,000 units per year,the return on investment should be:

A) 12%
B) 15%
C) 16%
D) 18%

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

Correct Answer

verified

Show Answer

Question 33

Multiple Choice

Review LaterAdd Note

Ahina Industries is a division of a major corporation.Data concerning the most recent year appears below: -The division's turnover is closest to:

All other things the same,a decrease in average operating assets will increase return on investment (ROI).

Deano Products is a division of a major corporation.The following data are for the last year of operations: -The division's return on investment (ROI) is closest to:

Residual income is primarily useful because it helps to compare the performance of divisions of different sizes.

Beak Industries is a division of a major corporation.Last year the division had total sales of $10,600,000,net operating income of $1,070,600,and average operating assets of $4,000,000. -The division's return on investment (ROI) is closest to:

If improvement in a performance measure on a balanced scorecard should lead to improvement in another performance measure,but does not,then management should reexamine its strategy.

The Consumer Products Division of Garafalo Corporation had average operating assets of $300,000 and net operating income of $46,900 in March.The minimum required rate of return for performance evaluation purposes is 16%. -What was the Consumer Products Division's residual income in March?

Niesen Corporation has two major business segments-Consumer and Commercial.Data for the segment and for the company for August appear below: In addition,common fixed expenses totaled $282,000 and were allocated as follows: $127,000 to the Consumer business segment and $155,000 to the Commercial business segment. -The contribution margin of the Commercial business segment is:

The emphasis in the balanced scorecard is on improvement rather than meeting a preset standard.

Data for September for Mossman Corporation and its two major business segments,North and South,appear below: In addition,common fixed expenses totaled $319,000 and were allocated as follows: $160,000 to the North business segment and $159,000 to the South business segment. -The contribution margin of the South business segment is:

Ieso Company has two stores: J and K.During November,Ieso Company reported a net operating income of $30,000 and sales of $450,000.The contribution margin in Store J was $100,000,or 40% of sales.The segment margin in Store K was $30,000,or 15% of sales.Traceable fixed expenses are $60,000 in Store J,and $40,000 in Store K. -Variable expenses in Store K totaled:

A company's average operating assets are $220,000 and its net operating income is $44,000.The company invested in a new project,increasing average assets to $250,000 and increasing its net operating income to $49,550.What is the project's residual income if the required rate of return is 20%?

Deano Products is a division of a major corporation.The following data are for the last year of operations: -The division's residual income is closest to:

Data for September for Mossman Corporation and its two major business segments,North and South,appear below: In addition,common fixed expenses totaled $319,000 and were allocated as follows: $160,000 to the North business segment and $159,000 to the South business segment. -A properly constructed segmented income statement in a contribution format would show that the segment margin of the North business segment is:

Harstin Corporation has provided the following data: -The minimum required rate of return for the past year was:

The Winter Products Division of American Sports Corporation produces and markets two products for use in the snow: Sleds and Saucers.The following data were gathered on activities last month: Required: Prepare a segmented income statement in the contribution format for last month.

Financial data for Beaker Company for last year appear below: The company paid dividends of $2,100 last year.The "Investment in Cedar Company" on the statement of financial position represents an investment in the stock of another company. Required: a.Compute the company's margin,turnover,and return on investment for last year. b.The Board of Directors of Beaker Company has set a minimum required return of 20%. What was the company's residual income last year?

Ceder Products is a division of a major corporation.Last year the division had total sales of $21,520,000,net operating income of $538,000,and average operating assets of $8,000,000.The company's minimum required rate of return is 18%. -The division's return on investment (ROI) is closest to: