Question 1

Clydesdale Company has sales of $4,500,000, invested assets of $2,000,000, and operating expenses of $3,600,000. The company has established a minimum return on investment of 7%.
-Clydesdale Company's profit margin is
A)20%
B)80%
C)44.4%
D)18%

Accepted Answer

The profit margin is calculated as (Net Income / Sales) * 100. Net Income is Sales - Operating Expenses, which is $4,500,000 - $3,600,000 = $900,000. Therefore, the profit margin is ($900,000 / $4,500,000) * 100 = 20%.

Question 2

Managers of what type of decentralized units have authority and responsibility for revenues, costs, and assets invested in the unit?
A)profit center
B)investment center
C)production center
D)cost center

Accepted Answer

Investment centers are responsible for generating revenue, controlling costs, and managing assets invested in the unit. Profit centers are responsible for generating revenue and controlling costs, but may not have control over assets. Production centers are typically responsible for producing goods or services, but may not have control over revenue, costs, and assets. Cost centers are responsible for controlling costs, but may not have control over revenue and assets.

Question 3

Mason Corporation had $650,000 in invested assets, sales of $700,000, operating income amounting to $99,000, and a desired minimum return on investment of 15%.
-The investment turnover for Mason Corporation is
A)1.08
B)0.93
C)6.57
D)7.07

Accepted Answer

Investment turnover is calculated by dividing sales by invested assets. For Mason Corporation, this is $700,000 / $650,000 = 1.08.

Question 4

Chicks Corporation had $1,100,000 in invested assets, sales of $1,210,000, operating income amounting to $302,500, and a desired minimum return on investment of 15%.​
-The investment turnover for Chicks Corporation is
A)1.3
B)1.5
C)1.0
D)1.1

Accepted Answer

Investment turnover is calculated as Sales divided by Invested Assets. For Chicks Corporation, it is $1,210,000 / $1,100,000 = 1.1.

Question 5

The support department cost that will be allocated to the Super Division is
A)$350,000
B)$100,000
C)$125,000
D)$550,000

Accepted Answer

Without specific details on how the support department costs are allocated, it's impossible to provide a rationale for the correct answer. However, if A is marked as correct, it typically would be based on a given allocation method or rate provided in the question's details, such as a percentage of usage or a fixed allocation formula.

Question 6

Clydesdale Company has sales of $4,500,000, invested assets of $2,000,000, and operating expenses of $3,600,000. The company has established a minimum return on investment of 7%.
-Clydesdale Company's investment turnover is
A)1.80
B)2.25
C)1.25
D)1.4

Accepted Answer

The answer of Clydesdale Company has sales of $4,500,000, invested...

Question 7

Mason Corporation had $650,000 in invested assets, sales of $700,000, operating income amounting to $99,000, and a desired minimum return on investment of 15%.
-Marshall Corporation had $220,000 in invested assets, sales of $242,000, operating income of $66,000, and a desired minimum return on investment of 3%. The return on investment for Marshall Corporation is
A)9.1%
B)30%
C)3.0%
D)27.3%

Accepted Answer

The return on investment (ROI) is calculated as (Operating Income / Invested Assets) * 100. For Marshall Corporation, ROI = ($66,000 / $220,000) * 100 = 30%.

Question 8

Chicks Corporation had $1,100,000 in invested assets, sales of $1,210,000, operating income amounting to $302,500, and a desired minimum return on investment of 15%.​
-The profit margin for Chicks Corporation is
A)25%
B)22%
C)15%
D)27.5%

Accepted Answer

The profit margin is calculated as operating income divided by sales. For Chicks Corporation, this is $302,500 / $1,210,000 = 0.25 or 25%.

Question 9

Mason Corporation had $650,000 in invested assets, sales of $700,000, operating income amounting to $99,000, and a desired minimum return on investment of 15%.
-The residual income for Mason Corporation is
A)$0
B)$84,150
C)$(6,000)
D)$1,500

Accepted Answer

Residual income is calculated as operating income minus the product of invested assets and the desired minimum return. Here, it is $99,000 - ($650,000 * 0.15) = $99,000 - $97,500 = $1,500.

Question 10

Clydesdale Company's residual income is
A)$252,000
B)$900,000
C)$1,400,000
D)$760,000

Accepted Answer

The answer of Clydesdale Company's residual income is
A)$252,000
B)$900,000
C)$1,400,000
D)$760,000...

Question 11

The support department cost that will be allocated to the Macro Division is
A)$405,000
B)$175,000
C)$130,000
D)$305,000

Accepted Answer

Without specific details on how the support department costs are allocated to the Macro Division, it's impossible to provide a detailed explanation. The correct answer would depend on the allocation method used (e.g., direct method, step-down method, reciprocal method), the total costs of the support departments, the bases of allocation (e.g., square footage, direct labor hours, machine hours), and the specific figures related to the Macro Division. Since no data or context is provided, a precise explanation for why $405,000 is the correct allocation cannot be given.

Question 12

The operating income of the Super Division after all support department allocations will be
A)$300,000
B)$325,000
C)$550,000
D)$200,000

Accepted Answer

The answer of The operating income of the Super Division...

Question 13

Blaser Corporation had $275,000 in invested assets, sales of $330,000, operating income amounting to $33,000, and a desired minimum return on investment of 7.5%. The return on investment for Blaser Corporation is
A)8.3%
B)10%
C)12%
D)7.5%

Accepted Answer

The answer of Blaser Corporation had $275,000 in invested assets,...

Question 14

The operating income of the Macro Division after all support department allocations will be
A)$780,000
B)$375,000
C)$575,000
D)$435,000

Accepted Answer

The answer of The operating income of the Macro Division...

Question 15

Mason Corporation had $650,000 in invested assets, sales of $700,000, operating income amounting to $99,000, and a desired minimum return on investment of 15%.
-The profit margin for Mason Corporation is
A)7.1%
B)20%
C)15.2%
D)14.1%

Accepted Answer

The answer of Mason Corporation had $650,000 in invested assets,...

Question 16

The operating income of the Micro Division after all support department allocations will be
A)$305,000
B)$650,000
C)$345,000
D)$610,000

Accepted Answer

The correct choice is $305,000, which is the operating income after accounting for all support department allocations.

Question 17

Chicks Corporation had $1,100,000 in invested assets, sales of $1,210,000, operating income amounting to $302,500, and a desired minimum return on investment of 15%.​
-The residual income for Chicks Corporation is
A)$165,000
B)$302,500
C)$137,500
D)$191,500

Accepted Answer

Residual income is calculated as operating income minus the product of the desired minimum return rate and invested assets. Here, it's $302,500 - (15% of $1,100,000) = $302,500 - $165,000 = $137,500.

Question 18

ABC Corporation has three support departments with the following costs and cost drivers:  ABC has three operating divisions, Micro, Macro, and Super. Their revenue, cost, and activity information are as follows:  ​
-The support department allocation rate for the Personnel Department is
A)$2,758
B)$3,200
C)$3,077
D)$1,000

Accepted Answer

The answer of ABC Corporation has three support departments with...

Question 19

The support department cost that will be allocated to the Micro Division is
A)$200,000
B)$145,000
C)$60,000
D)$345,000

Accepted Answer

The correct answer is obtained by summing up the allocated costs from the support departments to the Micro Division, which totals $345,000.

Question 20

Clydesdale Company has sales of $4,500,000, invested assets of $2,000,000, and operating expenses of $3,600,000. The company has established a minimum return on investment of 7%.
-Clydesdale Company's return on investment is
A)56%
B)20%
C)45%
D)25%

Accepted Answer

The answer of Clydesdale Company has sales of $4,500,000, invested...

Quiz 24: Evaluating Decentralized Operations

Clydesdale Company has sales of $4,500,000, invested assets of $2,000,000, and operating expenses of $3,600,000. The company has established a minimum return on investment of 7%. -Clydesdale Company's profit margin is

Managers of what type of decentralized units have authority and responsibility for revenues, costs, and assets invested in the unit?

Mason Corporation had $650,000 in invested assets, sales of $700,000, operating income amounting to $99,000, and a desired minimum return on investment of 15%. -The investment turnover for Mason Corporation is

Chicks Corporation had $1,100,000 in invested assets, sales of $1,210,000, operating income amounting to $302,500, and a desired minimum return on investment of 15%. -The investment turnover for Chicks Corporation is

The support department cost that will be allocated to the Super Division is

Clydesdale Company has sales of $4,500,000, invested assets of $2,000,000, and operating expenses of $3,600,000. The company has established a minimum return on investment of 7%. -Clydesdale Company's investment turnover is

Chicks Corporation had $1,100,000 in invested assets, sales of $1,210,000, operating income amounting to $302,500, and a desired minimum return on investment of 15%. -The profit margin for Chicks Corporation is

Mason Corporation had $650,000 in invested assets, sales of $700,000, operating income amounting to $99,000, and a desired minimum return on investment of 15%. -The residual income for Mason Corporation is

Clydesdale Company's residual income is

The support department cost that will be allocated to the Macro Division is

The operating income of the Super Division after all support department allocations will be

Blaser Corporation had $275,000 in invested assets, sales of $330,000, operating income amounting to $33,000, and a desired minimum return on investment of 7.5%. The return on investment for Blaser Corporation is

The operating income of the Macro Division after all support department allocations will be

Mason Corporation had $650,000 in invested assets, sales of $700,000, operating income amounting to $99,000, and a desired minimum return on investment of 15%. -The profit margin for Mason Corporation is

The operating income of the Micro Division after all support department allocations will be

Chicks Corporation had $1,100,000 in invested assets, sales of $1,210,000, operating income amounting to $302,500, and a desired minimum return on investment of 15%. -The residual income for Chicks Corporation is

ABC Corporation has three support departments with the following costs and cost drivers: ABC has three operating divisions, Micro, Macro, and Super. Their revenue, cost, and activity information are as follows: -The support department allocation rate for the Personnel Department is

The support department cost that will be allocated to the Micro Division is

Clydesdale Company has sales of $4,500,000, invested assets of $2,000,000, and operating expenses of $3,600,000. The company has established a minimum return on investment of 7%. -Clydesdale Company's return on investment is