1.
Goal congruence exists when
A. the goals of the company harmonize with each other.
B. the company's managers are pursuing their own goals effectively.
C. the company's managers are pursuing the goals of the company.
D. all of the above are true.
2. The sequence that reflects increasing breadth of responsibility is
A. cost center, investment center, profit center.
B. cost center, profit center, investment center.
C. profit center, cost center, investment center.
D. investment center, cost center, profit center.
3. Compared to a jewelry store, a supermarket has
A. higher margin and higher turnover.
B. higher margin and lower turnover.
C. lower margin and higher turnover.
D. lower margin and lower turnover.
4. The segment margin of the Wire Division of a manufacturer should not include
A. Net sales of the Wire Division.
B. Fixed selling expenses of the Wire Division.
C. Variable selling expenses of the Wire Division.
D. The Wire Division’s fair share of the salary of the manufacturer’s president.
5. When using a contribution margin format for internal reporting purposes, the major distinction
between segment manager performance and segment performance is
R(5:6k.(96(7, 787
A. Unallocated fixed costs.
B. Direct variable costs of producing the product.
C. Direct fixed costs controllable by the segment manager.
R1x: 2400
D. Direct fixed costs controllable by others.
R8(+:ak/36k 6. Division A earns P6,000 on an investment of P36,000. On an investment of P84,000, Division B earns R19 =
(64/x. 10)
P12,000. Which of the following is true? (2(2
ROLA:16.67). A. Division A's profits are too low.
B. If there are further costs that are common to both divisions, the total company's ROI is probably
ROID:12 19/84K
14.29% C.
greater than 15%.
If the minimum desired ROI is 10%, Division A's residual income is lower than that of Division B.
R13/O
ROID D. ROI for Division B is greater than ROI for Division A.
=
7. A business is started with an investment of P1,000,000. The investor requires a rate of return of
10%. If the business produced total sales of P1,000,000 and a contribution margin of P500,000 and
had P350,000 of fixed costs, what is its residual income (RI)?
R1 150K. (1MX..
=
10)
⑰
sOK
8. A company operates under a decentralized structure. The company’s Western Division plans to
Min price purchase a needed component from the Eastern Division that is operating at capacity. Eastern incurs
relevant costs of P4 to manufacture the component and P1 to ship each unit, and it can sell the unit
= (2 02
+ externally at a price of P8 per unit. The Western Division incurs costs of P9 per unit and sells the
finished goods for P18 each. According to the general guideline for transfer-pricing situations, the
minimum transfer price per unit should be:
=5 (8 5)
⑧
+ -
:f
9. Each of the following statements represents a “best practice” for implementing and using the
balanced scorecard, except:
A. Balanced scorecard measures should be linked in a “cause-and-effect” manner.
B. Balanced scorecard measures should be consistent with an organization’s strategy.
C. Balanced scorecard measures should be changed as an organization’s strategy changes.
D. Balanced scorecard measures should & not be used as part of the performance evaluation process
as employees may focus too much on them.
10. A company is concerned that the number of patents and new products being developed by the
company is declining. Which one of the following perspectives of the balanced scorecard is most
relevant to this issue?
A. Internal process perspective
B. Financial perspective
C. Learning and growth perspective
D. Customer perspective
