Question : 101.Which of the following performance measures considered the most sophisticated : 1302902

101.Which of the following performance measures is considered the most sophisticated and is felt to give top management the most comprehensive method of evaluating subunits?

A.Balanced scorecard

B.Return on investment

C.Economic value added

D.Net income

102.In what manner does the balanced scorecard challenge managers?

                     To focus on the single most important measure to the company

                     To perform on a variety of dimensions simultaneously

                     To look forward as well as backward

A.I and II

B.II and III

C.I and III

D.I, II, and III

*103.A transfer price is the price that is used to value transfers of goods and services

A.from one subunit of a company to another subunit in the company.

B.from a subunit of a company to another company in the same industry.

C.from a subunit of the company to a wholesaler or retailer.

D.back to one of the company’s suppliers.

*104.Which one of the following is not an acceptable base for determining the transfer price?

A.Market prices

B.Variable costs

C.Full cost plus profit

D.Fixed cost

*105.Which of the following transfer prices will likely be closest to the opportunity cost of the product?

A.Variable costs less costs avoided on an internal transfer

B.Market price less costs avoided on an internal transfer

C.Variable cost

D.Full cost plus profit

*106.Sorenson Products has two divisions: a kitchen wares division that manufactures ceramic dishes and a ceramic resindivision that manufactures the resin used in creating ceramic products. All ceramic used by the kitchen waresdivision is supplied by the ceramic resindivision, which also supplies resinto outside companies.What is the best transfer price for the resin, assuming that the resindivision is operating at only 70 percent of capacity?

A.An amount that equates to the variable costs plus the contribution margin of the resin

B.An amount that equates to the market price of the resin

C.An amount that equates to the incremental cost of the resin

D.An amount that equates to the full cost of the resin

*107.When making a decision that involves a product transferred from another subunit of the company, the manager of the selling division should choose the alternative that

A.maximizes the profit of his subunit.

B.requires a negotiated transfer price.

C.minimizes the goods needed from another subunit of the company.

D.maximizes profit for the company as a whole.

*108. Which of the following is an incentive for managers who must deal with different tax rates in international markets?

A.Choose high transfer prices when goods are transferred to profit centers in a country with a low tax rate.

B.Choose high transfer prices when goods are transferred to profit centers in a country with a high tax rate.

C.Choose low transfer prices when goods are transferred to profit centers in a country with a high tax rate.

D.Avoid transferring goods to foreign countries to avoid tariffs.

*109.Which of the following methods of setting a transfer price most closely reflects an arm’s-length, independent transaction?

A.Full-cost price

B.Variable cost

C.Market price

D.Full-cost plus profit

*110.Which of the following is a disadvantage of using a negotiated transfer price instead of a cost-based transfer price?

A.It reflects underlyingopportunity costsassociated with producing goods.

B.Itencourages managers to sell products for less than variable costs.

C.It will allow one division to generate a large contribution margin and the other to generate no contribution margin.

D.The transfer price may reflect negotiating skills of subunit managers.