Question 1

Aguilera Industries is a division of a major corporation. Data concerning the most recent year appears below:  The division's return on investment (ROI) is closest to:
A)2.1%
B)29.2%
C)22.6%
D)5.8%

Accepted Answer

The answer of Aguilera Industries is a division of a...

Question 2

Garde Corporation keeps careful track of the time required to fill orders. Data concerning a particular order appear below:  The throughput time was:
A)36.2 hours
B)8.1 hours
C)3.3 hours
D)32.9 hours

Accepted Answer

The answer of Garde Corporation keeps careful track of the...

Question 3

Nash Corporation manufactures and sells custom snowmobiles. From the time an order is placed till the time the snowmobile reaches the customer averages 50 days. This 50 days is spent as follows:  What is Nash's manufacturing cycle efficiency (MCE) for its snowmobiles?
A)30.0%
B)37.5%
C)40.0%
D)60.0%

Accepted Answer

The answer of Nash Corporation manufactures and sells custom snowmobiles....

Question 4

Koogle Corporation uses residual income to evaluate the performance of its divisions. The company's minimum required rate of return is 13%. In August, the Commercial Products Division had average operating assets of $530,000 and net operating income of $76,700. What was the Commercial Products Division's residual income in August?
A)-$9,971
B)-$7,800
C)$7,800
D)$9,971

Accepted Answer

Residual Income = Net Operating Income - (Minimum Required Rate of Return x Average Operating Assets)

Residual Income = $76,700 - (0.13 x $530,000)
Residual Income = $76,700 - $68,900
Residual Income = $7,800

Therefore, the answer is (C).

Question 5

For the past year, Allargando Company recorded sales of $500,000 and average operating assets of $250,000. What is the margin that Allargando Company needed to earn in order to achieve an ROI of 12%?
A)6.00%
B)12.00%
C)2.00%
D)8.33%

Accepted Answer

The answer of For the past year, Allargando Company recorded...

Question 6

The Portland Division's operating data for the past two years is as follows:  The Portland Division's margin in Year 2 was 150% of the margin for Year 1. The turnover for Year 1 was:
A)10.00
B)2.00
C)1.50
D)3.20

Accepted Answer

The answer of The Portland Division's operating data for the...

Question 7

In September, the Universal Solutions Division of Mcallister Corporation had average operating assets of $120,000 and net operating income of $12,800. The company uses residual income, with a minimum required rate of return of 12%, to evaluate the performance of its divisions. What was the Universal Solutions Division's residual income in September?
A)-$1,600
B)$1,600
C)-$1,536
D)$1,536

Accepted Answer

The answer of In September, the Universal Solutions Division of...

Question 8

If operating income is $60,000, average operating assets are $240,000, and the minimum required rate of return is 20%, what is the residual income?
A)40%
B)25%
C)$12,000
D)$48,000

Accepted Answer

Residual income can be calculated by subtracting the minimum required rate of return from the operating income, and then multiplying it by the average operating assets.

Residual income = (Operating income - Minimum required rate of return * Average operating assets)
Residual income = ($60,000 - 0.20 * $240,000)
Residual income = $60,000 - $48,000
Residual income = $12,000

Therefore, the answer is (C) $12,000.

Question 9

Brletich Corporation keeps careful track of the time required to fill orders. Data concerning a particular order appear below:  The delivery cycle time was:
A)9.1 hours
B)21.1 hours
C)22.5 hours
D)3.7 hours

Accepted Answer

The answer of Brletich Corporation keeps careful track of the...

Question 10

The Portland Division's operating data for the past two years is as follows:  The Portland Division's margin in Year 2 was 150% of the margin for Year 1. The net operating income for Year 1 was:
A)$192,000
B)$128,000
C)$266,667
D)$208,000

Accepted Answer

Let the margin for year 1 be x. 
The margin for year 2 is 150% of x which is 1.5x.
From the table, we know that:
Net operating income = Margin - Expenses

For year 1:
$240,000 = x - $80,000
x = $320,000

For year 2:
$600,000 = 1.5x - $150,000
$750,000 = 1.5x
x = $500,000

Therefore, the net operating income for Year 1 was $320,000 - $80,000 = $240,000. 
The correct answer is B.

Question 11

Aguilera Industries is a division of a major corporation. Data concerning the most recent year appears below:  The division's turnover is closest to:
A)3.10
B)13.70
C)4.00
D)0.29

Accepted Answer

The answer of Aguilera Industries is a division of a...

Question 12

The following information relates to last year's operations at the Bread Division of Rison Bakery Inc.:  What was the Bread Division's minimum required rate of return last year?
A)12%
B)4%
C)15%
D)20%

Accepted Answer

The answer of The following information relates to last year's...

Question 13

Fruchter Corporation keeps careful track of the time required to fill orders. The times recorded for a particular order appear below:  The throughput time was:
A)4.6 hours
B)32.8 hours
C)11.0 hours
D)37.4 hours

Accepted Answer

The throughput time is the total time it takes from when an order is placed to when it is delivered to the customer. In this case, the time recorded for the order is 8.9 hours for processing and 2.1 hours for delivery. Therefore, the total throughput time is 8.9 + 2.1 = 11.0 hours. Option A, B, and D are incorrect as they are not the actual total throughput time for the order.

Question 14

The following information relates to last year's operations at the Paper Division of Germane Corporation:  What was the Paper Division's net operating income last year?
A)$24,300
B)$29,160
C)$145,800
D)$162,000

Accepted Answer

The answer of The following information relates to last year's...

Question 15

Given the following data:  The residual income would be:
A)$2,800
B)$0
C)$6,000
D)$8,000

Accepted Answer

The answer of Given the following data:  The residual...

Question 16

Ok Corporation keeps careful track of the time required to fill orders. Data concerning a particular order appear below:  The manufacturing cycle efficiency (MCE) was closest to:
A)0.47
B)0.02
C)0.07
D)0.12

Accepted Answer

The answer of Ok Corporation keeps careful track of the...

Question 17

Aguilera Industries is a division of a major corporation. Data concerning the most recent year appears below:  The division's margin is closest to:
A)32.3%
B)25.0%
C)29.2%
D)7.3%

Accepted Answer

The answer of Aguilera Industries is a division of a...

Question 18

Emerich Corporation keeps careful track of the time required to fill orders. The times recorded for a particular order appear below:  The manufacturing cycle efficiency (MCE) was closest to:
A)0.18
B)0.09
C)0.03
D)0.49

Accepted Answer

To calculate manufacturing cycle efficiency (MCE), we need to divide the value-added time by the total cycle time.

Value-added time = time spent on activities that directly add value to the product (in this case, filling orders)

Total cycle time = total time to complete the order from start to finish

From the given times, we can calculate the value-added time as follows:

Value-added time = 6 + 3 + 1 + 8 = 18 minutes

To calculate the total cycle time, we need to add up all the times:

Total cycle time = 6 + 3 + 1 + 8 + 5 + 4 + 2 = 29 minutes

Now, we can calculate MCE as follows:

MCE = Value-added time / Total cycle time

MCE = 18 / 29 = 0.62

The closest answer choice is B, 0.09. Therefore, the answer is B.

Question 19

Mccubbin Corporation keeps careful track of the time required to fill orders. The times recorded for a particular order appear below:  The delivery cycle time was:
A)25.0 hours
B)13.1 hours
C)27.0 hours
D)3.5 hours

Accepted Answer

The answer of Mccubbin Corporation keeps careful track of the...

Question 20

Chabot Company had the following results last year: net operating income, $2,160; turnover, 5; and ROI 18%. Chabot Company's average operating assets were:
A)$300,000
B)$60,000
C)$10,800
D)$12,000

Accepted Answer

The answer of Chabot Company had the following results last...

Quiz 10: Differential Analysis: the Key to Decision Making

Aguilera Industries is a division of a major corporation. Data concerning the most recent year appears below: The division's return on investment (ROI) is closest to:

Garde Corporation keeps careful track of the time required to fill orders. Data concerning a particular order appear below: The throughput time was:

Nash Corporation manufactures and sells custom snowmobiles. From the time an order is placed till the time the snowmobile reaches the customer averages 50 days. This 50 days is spent as follows: What is Nash's manufacturing cycle efficiency (MCE) for its snowmobiles?

For the past year, Allargando Company recorded sales of $500,000 and average operating assets of $250,000. What is the margin that Allargando Company needed to earn in order to achieve an ROI of 12%?

The Portland Division's operating data for the past two years is as follows: The Portland Division's margin in Year 2 was 150% of the margin for Year 1. The turnover for Year 1 was:

If operating income is $60,000, average operating assets are $240,000, and the minimum required rate of return is 20%, what is the residual income?

Brletich Corporation keeps careful track of the time required to fill orders. Data concerning a particular order appear below: The delivery cycle time was:

The Portland Division's operating data for the past two years is as follows: The Portland Division's margin in Year 2 was 150% of the margin for Year 1. The net operating income for Year 1 was:

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

The following information relates to last year's operations at the Bread Division of Rison Bakery Inc.: What was the Bread Division's minimum required rate of return last year?

Fruchter Corporation keeps careful track of the time required to fill orders. The times recorded for a particular order appear below: The throughput time was:

The following information relates to last year's operations at the Paper Division of Germane Corporation: What was the Paper Division's net operating income last year?

Given the following data: The residual income would be:

Ok Corporation keeps careful track of the time required to fill orders. Data concerning a particular order appear below: The manufacturing cycle efficiency (MCE) was closest to:

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

Emerich Corporation keeps careful track of the time required to fill orders. The times recorded for a particular order appear below: The manufacturing cycle efficiency (MCE) was closest to:

Mccubbin Corporation keeps careful track of the time required to fill orders. The times recorded for a particular order appear below: The delivery cycle time was:

Chabot Company had the following results last year: net operating income, $2,160; turnover, 5; and ROI 18%. Chabot Company's average operating assets were: