61.

 A responsibility center in which a manager is responsible for both revenues and costs is a(n) 
A. cost center.
B. revenue center.
C. profit center.
D. investment center
E. none of these.

62. A responsibility center in which a manager is responsible for revenues, cost, and investment
is a(n) 
A. cost center.
B. revenue center.
C. profit center.
D. investment center.
E. none of these.

63. The decision-making approach that allows managers at lower levels to make and implement
key decisions pertaining to their areas of responsibility is 
A. responsibility accounting.
B. controllable accounting.
C. decentralization.
D. optimal strategic accounting.
E. none of these.

64. Decentralization is frequently chosen by companies because it 

A. allows higher management to make all decisions.
B. allows higher management to gather local information to make better decisions.
C. protects segments of the company from competitive pressures.
D. allows for training and motivation of local managers.
E. allows the CEO to make all important decisions.

 
65. A segment of Mega Inc., manufactures and sells blankets. The various models of blankets are
produced in a single factory using stable technology. They are sold by the sales department, also
located in the factory. The segment is most probably accounted for as a(n) 
A. cost center.
B. revenue center.
C. profit center.
D. investment center.
E. none of these.

66. JetSky Airways has three divisions, the Western Division, the Eastern Division, and the
Northern Division. The manager of the Western Division had wanted to purchase replacement
airplanes for the division. However, he decided against it because, although revenues would
increase and the new planes would be less expensive to operate, the initial cost of the planes was
quite large. The Western Division is most probably accounted for as a(n) 
A. cost center.
B. investment center.
C. profit center.
D. revenue center.
E. none of these.

67. Return on investment (ROI) is calculated as 

A. operating income/average operating assets.
B. average operating assets/operating income.
C. (beginning operating assets + ending operating assets)/2.
D. sales/average operating assets.
E. operating income/sales.

68. Margin is calculated as  
A. operating income/sales.
B. average operating assets/operating income.
C. (beginning operating assets + ending operating assets)/2.
D. sales/average operating assets.
E. operating income/average operating assets operating income/sales.

 
69. Turnover is calculated as  
A. operating income/average operating assets.
B. average operating assets/operating income.
C. (beginning operating assets + ending operating assets)/2.
D. sales/average operating assets.
E. operating income/sales.

70. A positive result that stems from the use of return on investment (ROI) is that it encourages
managers to focus on 
A. the relationship among sales, expenses, and investment.
B. cost efficiency.
C. operating asset efficiency.
D. the efficient use of resources in generating income.
E. all of these.