Which of the following statements concerning performance evaluation tools used in decentralized operations is correct? A. Performance reports can only be used to evaluate the performance of cost centers. B. A negative residual income indicates that a segment's return on investment is greater than the company's target rate of return. C. Segment margin is calculated by subtracting a segment's total traceable costs from its sales revenue. D. A segment's return on investment can be calculated by dividing the segment's sales margin percentage by its capital turnover ratio. E. Segmented income statements are also referred to as budget versus actual reports.

Which of the following statements concerning performance evaluation tools used in decentralized operations is correct? A. Performance reports can only be used to evaluate the performance of cost centers. B. A negative residual income indicates that a segment's return on investment is greater than the company's target rate of return. C. Segment margin is calculated by subtracting a segment's total traceable costs from its sales revenue. D. A segment's return on investment can be calculated by dividing the segment's sales margin percentage by its capital turnover ratio. E. Segmented income statements are also referred to as budget versus actual reports.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter8: Tactical Decision-making And Relevant Analysis

Section: Chapter Questions

Problem 14MCQ

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Which of the following is one of the two approaches used to analyze data in the decision to keep or discontinue a segment? A. comparing contribution margins and fixed costs B. comparing contribution margins and variable costs C. comparing gross margin and variable costs D. comparing total contribution margin under each alternative
When using a contribution margin format for internal reporting purposes, the major distinction between segment manager performance and segment performance is: A direct variable cost of selling the product. B direct fixed cost controllable by others. C unallocated fixed cost. D New direct fixed cost controllable by the segment manager
The following statements are true regarding the financial perspective EXCEPT:a. Financial performance can be improved through two basic approaches – revenuegrowth and productivity.b. Financial objectives typically relate to productivity.c. A financial measure might be net income.d. A financial objective might be to offer low process to satisfy and retain price-sensitivecustomers.
Which of the following statements about CVP analysis is false? O a. Operating income calculations in CVP analysis are based on contribution margin not gross margin. O b. Unit selling price, unit variable costs, and total fixed costs are known and remain constant. Oc. Managers use (CVP) analysis to study the behavior of and relationship among the elements such as total revenues, total costs, and income O d. Total revenues and total costs are linear in relation to output units. O e. All of the given answers are true. LEVIOUS PAGE FINISH ATTEMPT ... Finish Esc FnLock F1 F2 F3 F4 FB F9 F10 F11 @ 23 2$ % 1 3 4 6 8. Q W E IT Y S G Y J L. C NIM 24 Alt こ0 >
Which of the following statements about CVP analysis is false? O a. Operating income calculations in CVP analysis are based on contribution margin not gross margin. O b. Unit selling price, unit variable costs, and total fixed costs are known and remain constant. O c. Managers use (CVP) analysis to study the behavior of and relationship among the elements such as total revenues, total costs, and income O d. Total revenues and total costs are linear in relation to output units. O e. All of the given answers are true. OUS PAGE FINISH ATTEMPT ... F1 F2 F3 F4 F5 F6 F7 F8 F10 23 % & 2 3 4 7 8. V Q W T A F K 13 C V BYNI M 24 S
Which of the following statements about CVP analysis is false ? a. Total revenues and total costs are linear in relation to output units . b. Managers use (CVP ) analysis to study the behavior of and relationship among the elements such as total revenues , total costs , and income c. All of the given answers are true . d. Unit selling price , unit variable costs , and total fixed costs are known and remain constant . e. Operating income calculations in CVP analysis are based on contribution margin not gross margin .
The measure that reflects an organization's variable and fixed cost relationship and indicates how a percentage change in sale from the current level will impact from the current level will impact profits is called the a. break-even point. b. contribution margin. ç. degree of operating leverage. d gross margin. e. margin of safety.
Which of the following is a limitation of the gross profit variance analysis? a. The level of efficiency of asset management department can be computed and shown b. It includes the amount invested in working capital c. Measurement of the impact on gross profit due changes in sales volume cannot be determined d. The gross profit variance analysis is limited only on the product attributable cost
Which of the following is not an assumption underlying cost-volume-profit analysis? a.The break-even point will be passed during the period. b.Total sales and total costs can be represented by straight lines. c.Costs can be accurately divided into fixed and variable components. d.The sales mix is constant.
Which of the following is not an assumption underlying cost-volume-profit analysis?a. The sales mix is constant.b. The break-even point will be passed during the period.c. Total sales and total costs can be represented by straight lines.d. Costs can be accurately divided into fixed and variable components.
When using a segmented income statement, what is the best number to look at to determine the effect of the elimination of a segment on the net operating income of the company as a whole? O Multiple Choice the product line's sales dollars the product line's contribution margin the product line's segment margin the product line's segment margin minus an allocated portion of common fixed expenses
Which of the following statements is true? Return on investment (ROI) equals margin multiplied by sales. When used in return on investment (ROI) calculations, turnover equals sales divided by average operating assets. An advantage of using ROI to evaluate performance is that it encourages the manager to reduce the investment in operating assets as well as increase net operating income.