Statement 1: Sub-optimization occurs when one organizational segment takes action

that is in its own best interests, but it is detrimental to the organization as a whole.

Statement 2: Segment manager’s salary is a traceable fixed costs to a particular

segment and it is ignored when computing short-run performance margin.

TRUE ; TRUE
TRUE ; FALSE
FALSE ; TRUE
FALSE ; FALSE

Statement 1: In responsibility accounting system ensures that managers will be held

accountable only for items they can control.

Statement 2: To achieve goal congruence and managerial effort, employees must have
authority.

TRUE ; TRUE
TRUE ; FALSE
FALSE ; TRUE
FALSE ; FALSE

Brummitt Corporation has two divisions: the BAJ Division and the CBB Division. The
corporation's net operating income is P10,700. The BAJ Division's divisional segment
margin is P71,600 and the CBB Division's divisional segment margin is P43,200. What
is the amount of the common fixed expense not traceable to the individual divisions?

P104,100
P101,400
P110,400
None of these
Quinnett Corporation has two divisions: the Export Products Division and the Business
Products Division. The Export Products Division's divisional segment margin is $30,400
and the Business Products Division's divisional segment margin is $87,600. The total
amount of common fixed expenses not traceable to the individual divisions is $96,500.

What is the company's net operating income?

P21,500
P25,400
P24,500
P26,300

In a responsibility accounting system, managerial performance should be evaluated on

the basis of those factors controllable or capable of being significantly influenced by the
manager. In a manufacturing firm, which of the following items is least likely to appear in
a performance report from a manager of one of the firm’s production departments?

Materials
Labor

Depreciation of factory building

Depreciation of administrative building

Which of the following statement/s is/are correct?

Statement 1: When a responsibility center manager takes an action that benefits his/her
responsibility center, but not the organization as a whole, there is lack of goal
congruence.

Statement 2: The cost center is the least complex type of segment or area of
responsibility that is accountable only for costs.

*
Statement one only
Statement two only
Both statement one and two
None of these statements