SEMESTER A221

BKAM 3023 MANAGEMENT ACCOUNTING II

QUIZ 1

1. Which of the following will not result in an increase in return on investment (ROI),
assuming other factors remain the same? 
A. A reduction in expenses.
B. An increase in net operating income.
C. An increase in operating assets.
D. An increase in sales
2. A segment of a business responsible for both revenues and expenses would be called: 
A. a cost center.
B. an investment center.
C. a profit center.
D. residual income.
3. A company had the following results last year: sales, RM700,000; return on investment,
28%; and margin, 8%. The average operating assets last year were: 
A. RM200,000
B. RM2,450,000
C. RM540,000
D. RM2,500,000
4. The Northern Division of the Smith Company had average operating assets totaling
RM150,000 last year. If the minimum required rate of return is 12%, and if last year's net
operating income at Northern was $20,000, then the residual income for Northern last year
was: 
A. RM20,000
B. RMl8,000
C. RM5,000
D. RM2,000

Reference for Questions 5 and 6

Beak Industries is a division of a major corporation. Last year the division had total sales of
RM10,600,000, net operating income of RM1,070,600, and average operating assets of
RM4,000,000.
 5. The division's margin is closest to: 
A. 37.7%
B. 26.8%
C. 47.8%
D. 10.1%
 

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6. The division's turnover is closest to: 
A. 2.09
B. 9.90
C. 2.65
D. 0.27

Reference for Questions 7 and 8.

The West Division of Fitzmaurice Corporation had average operating assets of RM450,000
and net operating income of RM87,300 in November. The minimum required rate of return
for performance evaluation purposes is 18%.
 
7. What was the West Division's minimum required return in November? 
A. RM87,300
B. RM15,714
C. RM96,714
D. RM81,000
 8. What was the West Division's residual income in November? 
A. -RM15,714
B. RM15,714
C. RM6,300
D. -RM6,300
 
Reference for Questions 9 and 10.
The Consumer Products Division of Garafalo Corporation had average operating assets of
RM300,000 and net operating income of RM46,900 in March. The minimum required rate of
return for performance evaluation purposes is 16%.
 9. What was the Consumer Products Division's minimum required return in March? 
A. RM55,504
B. RM48,000
C. RM7,504
D. RM46,900
10. What was the Consumer Products Division's residual income in March? 
A.RM7,504
B. RM1,100
C. -RM7,504
D. -RM1,100