Question 1

Which of the following is a measure of a manager's performance working in a profit center?

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Question 2

The residual income for Mason is

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Question 3

Responsibility accounting reports for profit centers will include

Accepted Answer

Responsibility accounting reports for profit centers will include both revenues and expenses in order to calculate net income or loss from operations. This information is critical for evaluating the profitability of the profit center and making decisions about resource allocation and improvement opportunities. Including only costs or revenues alone would not provide a complete picture of the center's performance. Fixed assets may be included in a separate report, but would not be considered in the context of responsibility accounting for profit centers.

Question 4

What is the service department charge rate for the Accounting Department?

Accepted Answer

The service department charge rate for the Accounting Department is given as $250 in the statement.

Question 5

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

Accepted Answer

The rate of return on investment can be calculated using the formula: 
Rate of Return on Investment = Income from Operations / Invested Assets

Substituting the given values, we get: 
Rate of Return on Investment = 33,000 / 275,000

Rate of Return on Investment = 0.12 or 12%

As the desired minimum rate of return is 7.5%, and the actual rate of return on investment is 12%, Blaser Corporation's return is more than the desired minimum rate, so the best choice is  option C) 12%.

Question 6

The net income for Train Corporation is

Accepted Answer

Net income is calculated by subtracting total expenses from total revenues. In this case, the total revenue is $540,000 and the total expenses are $504,060, resulting in a net income of $35,940. Therefore, the answer is B.

Question 7

The profit margin for Mason is

Accepted Answer

To find the profit margin, we need to divide the profit by the revenue and multiply by 100 to get a percentage. In this case, profit is $56,000 ($280,000 - $224,000) and revenue is $400,000. So the profit margin is (56,000/400,000) * 100 = 14%. The closest option is D, which is 14.1%.

Question 8

The investment turnover for Mason is

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Question 9

What is the service department charge rate for Graphics Production?

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Question 10

What is the service department charge rate for the Personnel Department?

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Question 11

How much service department cost would be allocated to the Super Division?

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Question 12

What will the income of the Micro Division be after all service department allocations?

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Question 13

How much service department cost will be allocated to the Micro Division?

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Question 14

What will the income of the Super Division be after all service department allocations?

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Question 15

How much service department cost would be allocated to the Macro Division?

Accepted Answer

The service department costs are allocated based on the step-down method. First, $100,000 is allocated to the Micro Division. Then, $300,000 is allocated to the Macro Division (including the $100,000 already allocated to Micro). Since the Macro Division is the last one to receive the allocation, it receives the fully allocated service department costs of $405,000 ($300,000 + $100,000 + $5,000). Therefore, the answer is A.

Question 16

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

Accepted Answer

The rate of return on investment (ROI) is calculated by dividing the income from operations by the invested assets. For Marshall Corporation, this is $66,000 / $220,000 = 0.3 or 30%.

Question 17

The income from operations for the Locomotive Division is

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Question 18

What will the income of the Macro Division be after all service department allocations?

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Question 19

Which of the following would not be considered an internal centralized service department?

Accepted Answer

The manufacturing department is typically a production department that is responsible for producing goods or delivering services. It is not a centralized service department that provides support services to other departments within the organization. The other options listed are internal centralized service departments that provide support services to other departments within the organization.

Question 20

Some organizations use internal service departments to provide like services to several divisions or departments within an organization.Which of the following would probably not lend itself as a service department?

Accepted Answer

Inventory control is typically a function that is closely tied to a department's operations, rather than a service that can be provided to multiple departments. Services such as payroll accounting, information systems, and human resources can be centralized and provide benefit to multiple departments within an organization.

Quiz 23: Evaluating Decentralized Operations