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Study Resources (Accounting)

57) Data on three unrelated companies are given in the following table.   Alpha Company Beta Industries Capa Inc         Sales $54,000 ? $261,000 Operating income $21,600 $58,950 ? Total assets $36,000 ? ? Profit margin ? 15% 10% Asset turnover ? 4.80 ? Return on investment (ROI) ? ? 29% Target rate of return 9% 20% ? Residual income ? ? $10,800 Fill in the missing information. .
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6) All four perspectives must be included on each individual company's balanced scorecard. 7) The number of on-time deliveries would be an example of measuring which perspective? A) Financial B) Customer C) Internal business D) Learning and growth 8) Employee satisfaction would be an example of measuring which perspective? A) Financial B) Customer C) Internal business D) Learning and growth 9).
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1) The process of making capital investment decisions is referred to as capital return. 2) Self-scan check-out machines are an example of capital assets. 3) Capital budgeting is based on job costing. 4) Choosing among alternative capital investments is called capital rationing. 5) Post-audits of capital investments help determine the net cash flows generated.
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21) Assume the Cell Phone Division of the First Electronics Corporation had the following results last year (in thousands). Management's target rate of return is 10% and the weighted average cost of capital is 7%. Its effective tax rate is 30%. Sales $6,000,000 Operating income 900,000 Total assets 3,000,000 Current.
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28) Classify each of the following key performance indicators according to the balanced scorecard perspective it addresses. Choose from financial perspective (F), customer perspective (C), internal business perspective (IB), or learning and growth (LG) perspective. a. _____  Average machine setup time b. _____  Number of new customers c. _____  Customer satisfaction ratings d. _____ .
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64) The following information for Alpha Company was available for the past year: Sales $925,000 Operating Income $64,750 Total Assets $185,000 Current Liabilities $25,000 Management has a 25% target rate of return. Alpha Company's weighted average cost of capital is 17% and its effective tax rate is 32%. Calculate the EVA. 65) The following information for Alpha Company was available for.
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26) During the week, Hoster's potato chip  manufacturing facility purchased 30,000 kilograms of potatoes (transferred from its potato farming operations) at a price of $1.25 per kilogram.  The standard price per kilogram is $1.40. During the week, 26,000 kg of potatoes were used. The standard quantity of potatoes that should.
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41) The following data relates to the Miracle Corporation and its Toy Division. Toy Division sales $8,000,000 Toy Division operating income $480,000 Toy Division total assets $2,000,000 Toy Division current liabilities $600,000 Corporate target rate of return 14% Corporate weighted average cost of capital 10% Corporate effective tax rate 30% What is the Toy Division's.
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22) The financial results for one of  the subunits of Factory Six Racing is presented in the partially completed performance evaluation report below. Subunit - CobraST   Actual   Flexible Budget Flexible Budget Variance (U or F)   Percentage* Variance (U or F) Sales $194,000 $180,000 Cost of goods sold   104,000   100,000 Gross margin $90,000 $80,000 Operating expenses     21,000     20,000 Operating income before service department charges $69,000 $60,000 Service department charges (allocated)     14,000     10,000 Operating income $55,000 $50,000 Required: 1. .
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1) Performance evaluation systems provide top management with a framework for maintaining control over the organization. 2) Comparing company results against industry benchmarks is often less useful than comparing actual results against budget amount. 3) Comparing a company's achievements against best practices in the industry is called benchmarking. 4) Financial measures are lead.
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23) The financial results for one of  the subunits of Factory Six Racing is presented in the partially completed performance evaluation report below. Subunit - CobraST   Actual   Flexible Budget Flexible Budget Variance (U or F)   Percentage* Variance (U or F) Sales $180,000 $194,000 Cost of goods sold   100,000   104,000 Gross margin $80,000 $90,000 Operating expenses     20,000     21,000 Operating income before service department charges $60,000 $69,000 Service department charges (allocated     10,000     14,000 Operating income $50,000 $55,000 Required: 1. .
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1) Responsibility accounting performance reports capture the financial performance of cost, revenue and profit centers. 2) The difference between actual results and budgeted amounts is called a variance. 3) Cost center performance reports typically focus on the static budget variance. 4) Management by perception is used to determine which variances to investigate. 5) Revenue.
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61) The following information for Comfy Inns was available for the past year: Sales $600,000 Operating Income $156,000 Total Assets $400,000 Current Liabilities $165,000 Management has a 25% target rate of return. Comfy's weighted average cost of capital is 17% and its effective tax rate is 32%. Calculate the EVA. 62) The following information for Hamton Inns was available for the.
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11) Which of the following goals of a performance evaluation system is accomplished when subunit managers are provided with performance targets? A) Benchmarking B) Communicating company's expectations C) Promoting goal congruence D) Providing feedback 12) Which of the following goals of a performance evaluation system is accomplished when the company's actual results are compared to.
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11) Which of the following responsibility centers use a performance report that compares only actual revenues and budgeted revenues? A) Cost center B) Revenue center C) Investment center D) All of the above 12) What is it called when managers look at the size of the variances between actual results and budgeted amounts in order.
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60) Data on three unrelated companies are given in the following table.   Comfy Inn Hamton Inn Night Inn         Revenue $600,000 ? $1,500,000 Operating income $156,000 $252,000 ? Total assets $400,000 ? ? Profit margin ? 30% 30% Asset turnover ? 0.6 ? Return on investment (ROI) ?   ? 20% Target rate of return 25% 15.0% ? Residual income ? ? $45,000 Fill in the missing information. .
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24) The financial results for one of  the subunits of Factory Six Racing is presented in the partially completed performance evaluation report below. Subunit - CobraST   Actual   Flexible Budget Flexible Budget Variance (U or F)   Percentage * Variance (U or F) Sales…………………………………………………… $225,000 $243,000 Cost of goods sold……………………………………..   125,000   130,000 Gross margin………………………………………….. $100,000 $113,000 Operating expenses…………………………………….     25,000     26,000 Operating income before service department charges…. $75,000 $87,000 Service department charges (allocated)…………………     12,500     17,500 Operating.
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11) Which of the following is a disadvantage of decentralization? A) Management does not have time to concentrate on long-term strategic planning. B) Unit managers may not understand the big picture of the company. C) Unit managers have decreased motivation and retention. D) Managers receive training and experience to allow advancement in the organization. 12).
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21) Brahma manufactures western hats. The company prepares flexible budgets and uses a standard cost system to control manufacturing costs. The following standard unit cost of a hat is based on the static budget volume of 14,000 hats per month: Direct materials (3.0 m2 × $6.00 per m2)$18.00 Direct labour (2 hours.
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11) How does depreciation affect the calculation of a project's accounting rate of return (ARR)? A) Depreciation is deducted from the annual cash inflows. B) Depreciation is added to the annual cash inflows. C) Depreciation does not affect ARR. D) Depreciation is only deducted if the ARR is less than the minimum required rate.
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21) The Frito-Lay division of PepsiCo is most likely treated as a(n): A) cost center. B) investment center. C) profit center. D) revenue center. 22) The production line at Dell Computers is most likely treated as a(n): A) cost center. B) investment center. C) profit center. D) revenue center. 23) The central reservation office at American Airlines is most likely.
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56) The Hotel Division of Treasure Island Corporation had the following results last year. Sales $15,000,000 Operating income $6,000,000 Total assets $10,000,000 Current liabilities $3,000,000 Management's target rate of return is 14% and the weighted average cost of capital is 10%. Its effective tax rate is 35%. Required: A.  Calculate the.
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23) Describe the limitations of financial performance measurement. 1) The balanced scorecard considers both financial and operational performance measures. 2) Customer satisfaction, operational efficiency, and employee excellence are often measured as part of the balanced scorecard approach. 3) The ultimate purpose of the balanced scorecard is to give management a balanced view of.
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20) D. Tarr Manufacturing gathered the following information for the year ended December 31: Actual Standard Sales$312,000$312,000 Cost of Goods Sold180,000 Direct materials variances: Price variance3,900 F Efficiency variance800 F Direct labor variances: Price variance2,200 U Efficiency variance800 F Overhead variances: Flexible budget variance1,850 F Production volume variance2,500 U Selling and administrative expenses 74,000 Prepare a standard cost income statement for Freeport Enterprises for.
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22) Brahma manufactures western hats. The company prepares flexible budgets and uses a standard cost system to control manufacturing costs. The following standard unit cost of a hat is based on the static budget volume of 20,000 hats per month: Direct materials (2.5 m2 × $5.00 per m2).$12.00 Direct labour (2 hours.
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59) Data on three unrelated companies are given in the following table.   Comfy Inn Hamton Inn Night Inn         Revenue $1,200,000 ? $3,185,000 Operating income $240,000 $210,000 ? Total assets $1,000,000 ? ? Profit margin ? 15% 18% Asset turnover ? 0.7 ? Return on investment (ROI) ? 27% Target rate of return 20% 8.0% ? Residual income ? ? $150,000 Fill in the missing information. .
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1) Small companies tend to use centralized decision making. 2) Companies that decentralize split their operations into different divisions or operating units. 3) Decentralization allows top management to concentrate on long-term strategic planning. 4) Decentralization allows top management to hire workers with expert knowledge for each business unit. 5) Decentralization helps keep a company's.
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22) Standard Products Company recognizes variances from standards at the earliest opportunity, and the quantity of direct materials purchased is equal to the quantity used. The following information is available for the most recent month. Assume the allocation base for fixed overhead costs is the number of units. Journalize the direct.
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58) Data on three unrelated companies are given in the following table.   Alpha Company Beta Industries Capa Inc         Sales $925,000 ? $390,000 Operating income $64,750 $179,400 ? Total assets $185,000 ? ? Profit margin ? 10% 18% Asset turnover ? 4.6 ? Return on investment (ROI) ? 54% Target rate of return 20% 25% ? Residual income ? ? $31,200 Fill in the missing information. .
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11) What is the name given to choosing among different alternative investments due to limited resources? A) Capital rationing B) Capital investing C) Resource rationing D) Resource allocation 12) Which capital budgeting method uses accrual accounting, rather than net cash flows, as a basis for calculations? A) Payback B) ARR C) NPV D) IRR 13) Which of the following is.
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1) The duties of an investment center manager are similar to those of a CFO. 2) Companies evaluate investment centers the way they evaluate profit centers. 3) Return on Investment (ROI) is defined as operating income divided by total assets. 4) The sales margin is operating income divided by sales. 5) Residual Income (RI).
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51) Selected financial data for the Entertainment Division of Magic Enterprises is as follows: Sales $7,200,000 Operating income $1,440,000 Total assets $3,000,000 Current liabilities $800,000 Required rate of return 8% Weighted average cost of capital 6% What is the Entertainment Division's sales margin? A) 11.11% B) 20.00% C) 48.00% D) 240.00% 52) Selected financial data for the Entertainment.
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32) Identify each of the following scenarios as being more typical of a decentralized (D) organization or a centralized (C) organization: a._____  Having formal training programs for lower level managers the company has a policy that they promote from within the company whenever possible b._____  The company is divided into several.
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23) Brahma manufactures western hats. The company prepares flexible budgets and uses a standard cost system to control manufacturing costs. The following standard unit cost of a hat is based on the static budget volume of 20,000 hats per month: Direct materials (2.5 m2 × $5.00 per m2)$12.00 Direct labour (2 hours.
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32) Following is a random-order listing of balanced scorecard strategic objectives. For each strategic objective indicate which perspective it best relates to. Choose from Financial Perspective, Customer Perspective, Internal Business Perspective , and Learning and Growth Perspective. a. Increase shareholder value______________________________ b. Retain customers______________________________ c. Enhance employee skills______________________________ d. Decrease per unit variable cost______________________________ 33).
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30) Classify each of the following key performance indicators according to the balanced scorecard perspective it addresses. Choose from financial perspective (F), customer perspective (C), internal business perspective (IB), or learning and growth (LG) perspective. a. _____  Average job-related training hours per employee b. _____  Return on equity c. _____  Customer profitability d. _____ .
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21) The financial results for one of  the subunits of Factory Six Racing is presented in the partially completed performance evaluation report below. Subunit - CobraST   Actual   Flexible Budget Flexible Budget Variance (U or F)   Percentage* Variance (U or F) Sales $243,000 $225,000 Cost of goods sold   130,000   125,000 Gross margin $113,000 $100,000 Operating expenses    26,000     25,000 Operating income before service department charges $87,000 $75,000 Service department charges (allocated)    17,500    12,500 Operating income $69,500 $62,500 *.
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26) Classify each of the following key performance indicators according to the balanced scorecard perspective it addresses. Choose from financial perspective (F), customer perspective (C), internal business perspective (IB), or learning and growth (LG) perspective. a. _____  Average length of the production process b. _____  Employee promotion rate c. _____  Cash flow.
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1) Investments with shorter payback periods are more desirable, all else being equal. 2) The payback method can only be used when the net cash inflows from a capital investment are the same for each period. 3) Capital budgeting predictions must consider factors such as changing consumer preferences, competition, and government regulations. 4).
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20) The Violet Company established a master budget volume of 30,000 units for September. Actual overhead costs incurred amounted to $84,500. Actual production for the month was 32,000 units. The standard variable overhead rate was $2 per direct labor hour. The standard fixed overhead rate was $1 per direct labor.
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16) Which of the following perspectives from the balanced scorecard focuses on continuing to improve and create value? A) Learning and growth perspective B) Internal business perspective C) Customer perspective D) Financial perspective 17) Which of the following perspectives from the balanced scorecard focuses on determining if customers are happy after the sale takes place? A).
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24) During the week, Hoster's potato chip  manufacturing facility purchased 20,000 kilograms of potatoes (transferred from its potato farming operations) at a price of $1.40 per kilogram.  The standard price per kilogram is $1.25. During the week, 19,500 kg of potatoes were used. The standard quantity of potatoes that should.
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