Question 1

How might return on investment be used in making resource allocation decisions within an organization?

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Question 2

Indicate whether each of the following statements about responsibility centers is

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Question 3

Indicate whether each of the following statements about transfer pricing is

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Question 4

What are the different bases that can be used to establish transfer prices? Which would you generally recommend?

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Question 5

What methods are used to measure operating assets for calculating return on investment? Which of these approaches would you recommend? Explain your choice.

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Question 6

Indicate whether each of the following statements about return on investment is

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Question 7

How should a responsibility report be prepared to support the practice of management by exception?

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Question 8

Select the term from the list that best matches the description or definition.Enter the number of the best answer in "Your Answer" column. \(\begin{array}{|l|l|l|}
\hline   \text {Your Answer } &  \text {Defiution or Description }&  \text {Term }  \
\hline  &  \text {  A. Practice of holding a manager responsible for reveme and expense items over which he or the exercises predominant control  }&  \text {1. Controllability concept }  \
\hline  &  \text {B. Type of responsiblity center where the manager influences only costs and is held acconntable for a specific output at a given level of cost}&  \text {2. Cost-based transfer price }  \
\hline  &  \text {C. Measure of the abality of a firm or segment within a firm to utilize available resources effectively to genterate a positive retum for shareholders}&  \text {3. Cost center }  \
\hline  &  \text { D. Transfer price based on the external market price less any cost savings}&  \text {4. Decentralization }  \
\hline  &  \text {E. Situation that motivates a manager to act in his or her own best interest even though the corporation as a whole nay suffer}&  \text {5. Investment center }  \
\hline  &  \text {F. The point in an organization where the control over revenue or expense items is located }&  \text {6. Management by exception }  \
\hline  &  \text {G. Transfer price that is based on the listorical or standard cost incurred by the supplying segnent}&  \text {7. Market-based transfer price }  \
\hline  &  \text {H. Type of responsibility center where the manager can inflnence revenues, expenses, and capital invested in his or her center to attain the best performance possible }&  \text {8. Negotiated transfer price }  \
\hline  &  \text { I. Type of responsibility center where the manager can influence both revemes and expenses for his or her center }&  \text {9. Profit center }  \
\hline  &  \text { J. Approach that evahates a managet on lis or her ability to maxinize the dollar value of earnings above some targeted level of earnings }&  \text {10. Residnal inconse}  \
\hline  &  \text { K. Reports comparing bodgeted and actual controllable costs for each center within a firm }&  \text {11. Responsibilty center }  \
\hline  &  \text { L. When variances from the budget are emphasize d in reporting procedures so that management concentrates its attention on those variances from the budget }&  \text {12. Responsibilty reports }  \
\hline  &  \text {  M. Transfer price that is established by agreement of both the selling and buying segments of the firm  }&  \text {13. Retum on investment }  \
\hline  &  \text {  N. Practice of delegating authority and responswility for the operation of business segments  }&  \text {14. Suboptinization}  \
\hline
\end{array}\)

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Question 9

Indicate whether each of the following statements is

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Question 10

Describe some of the factors and issues that must be considered in defining return and investment in calculating return on investment.

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Question 11

Indicate whether each of the following statements is

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Question 12

Mitchell Company has two divisions,Division A and Division B.Division A makes a product that Division B could use in making one of its products.Why do the managers of both divisions care about the amount of the transfer price?

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Question 13

Indicate whether each of the following statements is

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Question 14

Indicate whether each of the following statements is

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Question 15

Indicate whether each of the following statements about decentralization is

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Question 16

Indicate whether each of the following statements about transfer pricing is

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Question 17

Explain how the management by exception doctrine relates to responsibility accounting.

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Question 18

Indicate whether each of the following statements is

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Question 19

Indicate whether each of the following statements is

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Question 20

What are the advantages of using a market-based transfer price? Why is it not always used?

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Quiz 9: Responsibility Accounting

How might return on investment be used in making resource allocation decisions within an organization?

Indicate whether each of the following statements about responsibility centers is

Indicate whether each of the following statements about transfer pricing is

What are the different bases that can be used to establish transfer prices? Which would you generally recommend?

What methods are used to measure operating assets for calculating return on investment? Which of these approaches would you recommend? Explain your choice.

Indicate whether each of the following statements about return on investment is

How should a responsibility report be prepared to support the practice of management by exception?

Indicate whether each of the following statements is

Describe some of the factors and issues that must be considered in defining return and investment in calculating return on investment.

Indicate whether each of the following statements is

Mitchell Company has two divisions,Division A and Division B.Division A makes a product that Division B could use in making one of its products.Why do the managers of both divisions care about the amount of the transfer price?

Indicate whether each of the following statements is

Indicate whether each of the following statements is

Indicate whether each of the following statements about decentralization is

Indicate whether each of the following statements about transfer pricing is

Explain how the management by exception doctrine relates to responsibility accounting.

Indicate whether each of the following statements is

Indicate whether each of the following statements is

What are the advantages of using a market-based transfer price? Why is it not always used?