Professional Documents
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Reliability engineering.
Materials inspection.
Rework.
Warranty repairs.
The provisions of section 302 of the Sarbanes-Oxley Act (as originally enacted) require the signing officers of a
company to do all of the following except:
cost center.
revenue center.
profit center.
investment center.
contribution center.
A general calculation method for transfer prices that achieves goal congruence begins with the additional outlay cost
per unit incurred because goods are transformed and then
adds the opportunity cost per unit to the organization because of the transfer.
subtracts the opportunity cost per unit to the organization because of the transfer.
adds the sunk cost per unit to the organization because of the transfer.
subtracts the sunk cost per unit to the organization because of the transfer.
adds the sales revenue per unit to the organization because of the transfer.
A responsibility center in which the manager is held accountable for the profitable use of assets and capital is
commonly known as a(n):
cost center.
revenue center.
profit center.
investment center.
contribution center.
those costs that a manager can influence in the time period under review.
The Little Rock Division of Classics Companies currently reports a profit of $3.6 million. Divisional invested capital
totals $9.5 million; the imputed interest rate is 12%. On the basis of this information, Little Rock's residual income is:
$432,000.
$708,000.
$1,140,000.
$2,460,000.
$345,000.
$425,000.
$620,000.
$700,000.
$745,000.
The basic idea behind residual income is to have a division maximize its:
cost of capital.
cash flows.
invested capital.
The difference between the profit margin controllable by a segment manager and the segment profit margin is caused
by:
sales revenue.
Sunrise Corporation has a return on investment of 15%. A Sunrise division, which currently has a 13% ROI and
$750,000 of residual income, is contemplating a massive new investment that will (1) reduce divisional ROI and (2)
produce $120,000 of residual income. If Sunrise strives for goal congruence, the investment:
should not be acquired because the division's ROI is less than the corporate ROI before the investment is
considered.
should be acquired because it produces $120,000 of residual income for the division.
should be acquired because after the acquisition, the division's ROI and residual income are both positive numbers.
Which of the following bodies oversees audits and auditors, and sanctions firms and individuals for violations of laws
and regulations?
When managers of subunits throughout an organization strive to achieve the goals set by top management, the result
is:
goal congruence.
responsibility accounting.
Which of the following is the correct mathematical expression to derive a company's capital turnover?
Which of the following describes the goal that should be pursued when setting transfer prices?
Allow top management to become actively involved when calculating the proper dollar amounts.
Establish incentives for autonomous division managers to make decisions that are in the overall organization's best
interests (i.e., goal congruence).
Weston Company had sales revenue and operating expenses of $5,000,000 and $4,200,000, respectively, for the
year just ended. If invested capital amounted to $6,000,000, the firm's ROI was:
13.33%.
83.33%.
120.00%.
750.00%.
The amounts charged for goods and services exchanged between two divisions are known as:
opportunity costs.
transfer prices.
residual prices.
target prices.
Under section 404 of the Sarbanes-Oxley Act, auditors are required to:
Evaluate the company's internal control system periodically throughout the year.
All of these.
Which of the following is an appropriate base to distribute the cost of building depreciation to responsibility centers?
Additional Requirements