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Published by 000jaymin

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Published by: 000jaymin on Dec 07, 2008
Copyright:Attribution Non-commercial


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(Points: 10)Consider the following statements about goal congruence:I. Goal congruence is obtained when managers of subunits throughout an organization strive toachieve the goals set by top management.II. Managers are often more concerned about the performance of their own subunits rather thanthe performance of the entire organization.III. Achieving goal congruence in most organizations is relatively straightforward and easy toaccomplish.Which of the above statements is (are) true?1. I only2. II only.3. I and II.4. II and III.5. I, II, and III.
(Points: 10) Which of the following performance measures is (are) used to evaluate thefinancial success or failure of investment centers?1. Residual income.2. Return on investment.3. Number of suppliers.4. Economic value added.5. All of the above measures are used except "C".
(Points: 10) Symington's Western Division is currently purchasing a part from an outsidesupplier for $26 per unit. The company's Eastern Division, which has no excess capacity, makesand sells this part for external customers at a variable cost of $19 and a selling price of $29. If Eastern begins sales to Western, it (1) will use the general transfer-pricing rule and (2) will beable to reduce variable cost on internal transfers by $2. On the basis of this information, Easternshould establish a transfer price of:1. $17.2. $19.3. $27.4. $29.5. some other amount.
(Points: 10) Gail is contemplating a job offer with an advertising agency where she will make$50,000 in her first year of employment. Alternatively, Gail can begin to work in her father's business where she will earn an annual salary of $40,000. If Gail decides to work with her father,the opportunity cost would be:1. $0.2. $40,000.3. $50,000.4. $90,000.5. irrelevant in deciding which job offer to accept.
(Points: 10) Which of the following costs can be ignored when making a decision?
1. Opportunity costs.2. Differential costs.3. Sunk costs.4. Relevant costs.5. All future costs.
(Points: 10)Copper Top, which has excess capacity, received a special order for 3,000 units at a price of $14 per unit. Currently, production and sales are budgeted for 10,000 units without considering thespecial order. Budget information for the current year follows.Sales$170,000Less: Cost of goods sold 130,000Gross margin$ 40,000Cost of goods sold includes $30,000 of fixed manufacturing cost. If the special order is accepted,the company's income will:1. increase by $3,000.2. increase by $12,000.3. decrease by $3,000.4. decrease by $12,000.5. change by some other amount.
(Points: 10)

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