101. The responsibility accounting system is used to:
a. Evaluate management responsibilities and performance results of each department in achieving the common goals of the whole enterprise
b. Evaluating management responsibility of responsibility centers' managers
c. Evaluate the performance of responsibility centers
d. Decentralizing the management in decentralized enterprises in accordance with their organizational structure
102. Division A achieves a current ROI of 15%, which is higher than the minimum desired rate of return of division A by 3%. Division A has a new investment opportunity that requires investment assets of $30,000.00 which will generate revenue of $20,000 and incur costs of $15,800. If Division A's performance is evaluated based on RI, the opinion of the division A's manager about this investment opportunity is:
a. All are incorrect
b. Reject this investment opportunity because the ROI of the investment opportunity is lower than the current ROI
c. Accept this investment opportunity ROI of investment opportunity is greater than minimum ROI
d. Accept this investment opportunity because the RI of division A is now $600
103. Division A produces a part for sale to an external customer that has the following information:
Selling price/unit: $50/u
Variable cost per unit: $30 /u
Fixed cost per unit: $12/u
Production capacity: 40,000 units/year
Division B of the company buys similar parts from outside for $48/u. Assume that
Division B needs 10,000 units/year and Division A can sell 35,000 units to outsiders. If 10,000 units needed by Division B are supplied from Division A, this affects the company's profits:
a. $10,000 increased
b. $80,000 increased
c. All are incorrect
d. $20,000 decreased
104. A corporation has two companies. Company A is able to consume a maximum production capacity of 80,000 units of product X with a selling price of $30/u, and variable costs of $8/u. Instead of buying from outside with a unit price of $27, company B proposes company A internally transfers 5,000 units of product X. At that time, company A will save variable sales commission of $2/unit. As a result:
a. The internal transfer price should be in the range of (16,27)
b. It is unprofitable for the Corporation to make an internal transfer between two companies A and B
c. It is profitable for the Corporation to make an internal transfer between two companies A and B at the price of $2020/unit
d. Insufficient information to make an internal transfer decision
105. In division A of company X, the year 20x9 has the operating profit higher than residual profit (RI) by $150,000; Minimum desired rate of return is 10%. Total assets of division A in 20x9 are:
a. Unable to determine
b. $1,500,000
c. $1,000,000
d. $150,000
106. Tina Company sells two types of products: X and Y. The data related to the company for the month of July is as follows:
The common fixed cost in July is $70,000. What is the segment margin of product X?
a. $38,000
b. $120,000
c. $150,000
d. $70,000
107. Which of the following results is used to evaluate the managerial performance of divisional managers:
a. Controllable contribution margin minus segment fixed cost
b. Contribution margin minus controllable segment fixed cost
c. Contribution margin minus segment fixed cost
d. Contribution margin
108. Which of the following is not appropriate in management responsibility accounting:
a. Allocate common fixed costs to all responsibility centers
b. Goal/Plan is made for each responsibility center
c. Prepare performance reports for each responsibility center
d. Evaluate the performance for each responsibility center
109. Which of the following is NOT a disadvantage of ROI:
a. ROI doesn't make sense for companies that don't raise capital from borrowings
b. It is difficult to clearly determine the investment and the profit associated with that investment
c. ROI reflects the profitability of a firm in shorterm
d. In some situations, ROI makes divisional managers rejecting good projects that increases the overall ROI of the whole enterprise
110. In order to obtain the highest profit, the basis for a division making the decision of expanding the production in the long term is:
a. Division's gross profit ratio
b. Segment's contribution margin
c. Segment's contribution margin ratio
d. Segment margin ratio
a. Evaluate management responsibilities and performance results of each department in achieving the common goals of the whole enterprise
b. Evaluating management responsibility of responsibility centers' managers
c. Evaluate the performance of responsibility centers
d. Decentralizing the management in decentralized enterprises in accordance with their organizational structure
102. Division A achieves a current ROI of 15%, which is higher than the minimum desired rate of return of division A by 3%. Division A has a new investment opportunity that requires investment assets of $30,000.00 which will generate revenue of $20,000 and incur costs of $15,800. If Division A's performance is evaluated based on RI, the opinion of the division A's manager about this investment opportunity is:
a. All are incorrect
b. Reject this investment opportunity because the ROI of the investment opportunity is lower than the current ROI
c. Accept this investment opportunity ROI of investment opportunity is greater than minimum ROI
d. Accept this investment opportunity because the RI of division A is now $600
103. Division A produces a part for sale to an external customer that has the following information:
Selling price/unit: $50/u
Variable cost per unit: $30 /u
Fixed cost per unit: $12/u
Production capacity: 40,000 units/year
Division B of the company buys similar parts from outside for $48/u. Assume that
Division B needs 10,000 units/year and Division A can sell 35,000 units to outsiders. If 10,000 units needed by Division B are supplied from Division A, this affects the company's profits:
a. $10,000 increased
b. $80,000 increased
c. All are incorrect
d. $20,000 decreased
104. A corporation has two companies. Company A is able to consume a maximum production capacity of 80,000 units of product X with a selling price of $30/u, and variable costs of $8/u. Instead of buying from outside with a unit price of $27, company B proposes company A internally transfers 5,000 units of product X. At that time, company A will save variable sales commission of $2/unit. As a result:
a. The internal transfer price should be in the range of (16,27)
b. It is unprofitable for the Corporation to make an internal transfer between two companies A and B
c. It is profitable for the Corporation to make an internal transfer between two companies A and B at the price of $2020/unit
d. Insufficient information to make an internal transfer decision
105. In division A of company X, the year 20x9 has the operating profit higher than residual profit (RI) by $150,000; Minimum desired rate of return is 10%. Total assets of division A in 20x9 are:
a. Unable to determine
b. $1,500,000
c. $1,000,000
d. $150,000
106. Tina Company sells two types of products: X and Y. The data related to the company for the month of July is as follows:
| Product X | Product Y | |
| Revenue | $ 200,000 | $300,000 |
| Variable costs | 50,000 | 100,000 |
| Segment Fixed costs | 80,000 | 150,000 |
The common fixed cost in July is $70,000. What is the segment margin of product X?
a. $38,000
b. $120,000
c. $150,000
d. $70,000
107. Which of the following results is used to evaluate the managerial performance of divisional managers:
a. Controllable contribution margin minus segment fixed cost
b. Contribution margin minus controllable segment fixed cost
c. Contribution margin minus segment fixed cost
d. Contribution margin
108. Which of the following is not appropriate in management responsibility accounting:
a. Allocate common fixed costs to all responsibility centers
b. Goal/Plan is made for each responsibility center
c. Prepare performance reports for each responsibility center
d. Evaluate the performance for each responsibility center
109. Which of the following is NOT a disadvantage of ROI:
a. ROI doesn't make sense for companies that don't raise capital from borrowings
b. It is difficult to clearly determine the investment and the profit associated with that investment
c. ROI reflects the profitability of a firm in shorterm
d. In some situations, ROI makes divisional managers rejecting good projects that increases the overall ROI of the whole enterprise
110. In order to obtain the highest profit, the basis for a division making the decision of expanding the production in the long term is:
a. Division's gross profit ratio
b. Segment's contribution margin
c. Segment's contribution margin ratio
d. Segment margin ratio
