Question :
118.A responsibility report for a profit center will
a.not show controllable : 1311871
118.A responsibility report for a profit center will
a.not show controllable fixed costs.
b.not show indirect fixed costs.
c.show noncontrollable fixed costs.
d.not show cumulative year-to-date results.
119.The dollar amount of the controllable margin
a.is usually higher than the contribution margin.
b.is usually lower than the contribution margin.
c.is always equal to the contribution margin.
d.cannot be a negative figure.
120.Pippen Co. recorded operating data for its shoe division for the year. The company’s desired return is 5%.
Sales$1,000,000
Contribution margin200,000
Total direct fixed costs120,000
Average total operating assets400,000
Which one of the following reflects the controllable margin for the year?
a.20%
b.50%
c.$60,000
d.$80,000
121.Las Sendas, Inc. had average operating assets of $4,000,000 and sales of $2,000,000 in 2013. If the controllable margin was $600,000, the ROI was
a.60%
b.50%
c.30%
d.15%
122.Trails and Paths, Inc. had average operating assets of $6,000,000 and sales of $3,000,000 in 2013. If the controllable margin was $600,000, the ROI was
a.50%
b.40%
c.20%
d.10%
123.The area manager of the Red, White, and Brew Restaurants is considering two possible expansion alternatives. The required investments, expected controllable margins, and the ROIs of each are as follows:
ProjectInvestmentControllable MarginROI
Phoenix$120,000$30,00025%
Chicago$540,000$50,0009.25%
The Red, White, and Brew segment has currently $2,000,000 in invested capital and a controllable margin of $250,000. Which one of following projects will increase the Red, White, and Brew division’s ROI?
a.Both the Phoenix and Chicago options
b.Only the Phoenix option
c.Only the Chicago option
d.Neither the Phoenix nor the Chicago options
124.Bogey Co. recorded operating data for its Cheap division for the year. Bogey requires its return to be 10%.
Sales $ 1,400,000
Controllable margin160,000
Total average assets4,000,000
Fixed costs100,000
What is the ROI for the year?
a.4%
b.35%
c.6%
d.1.5%
125.Dingo Division’s operating results include: controllable margin of $150,000, sales totaling $1,200,000, and average operating assets of $500,000. Dingo is considering a project with sales of $100,000, expenses of $86,000, and an investment of average operating assets of $200,000. Dingo’s required rate of return is 9%. Should Dingo accept this project?
a.Yes, ROI will drop by 6.6% which is still above the minimum required rate of return.
b.No, the return is less than the required rate of 9%.
c.Yes, ROI still exceeds the cost of capital.
d.No, ROI will decrease to 7%.
1 26.Grown Industries reported the following items for 2013:
Income tax expense$ 60,000
Contribution margin200,000
Controllable fixed costs 80,000
Interest expense40,000
Total operating assets650,000
How much is controllable margin?
a.$200,000
b.$120,000
c.$60,000
d.$20,000
127.Griffin Corp. is evaluating its Piquette division, an investment center. The division has a $60,000 controllable margin and $400,000 of sales. How much will Griffin’s average operating assets be when its return on investment is 10%?
a.$600,000
b.$660,000
c.$400,000
d.$340,000
