Question : 41.Which of the following should not be included in the : 1257211

 

 

41.Which of the following should not be included in the investment base used to compute residual income?   

A. Accounts receivable

 

B. Inventory

 

C. Cash

 

D. Land held for future use

 

 

42.Which of the following may be used to establish transfer prices?   

A. Standard cost of a product

 

B. A negotiated price

 

C. Market price

 

D. All of these.

 

 

43.Which of the following is an advantage of using cost-based transfer prices?   

A. Such prices are an objective measure and easy to compute.

 

B. Such prices motivate the buying division to control cost.

 

C. Such prices provide a sense of fairness.

 

D. Such prices will usually exceed the market based or negotiated transfer prices.

 

 

44.The preferred method for setting transfer prices generally is some form of:   

A. Price based on negotiation.

 

B. Price based on industry cost averages.

 

C. Price based on historical costs.

 

D. Price based on market forces.

 

 

45.If a company is unable to use market-based transfer prices, the next best alternative is to use a price:   

A. Based on negotiation.

 

B. Based on variable cost.

 

C. Based on standard cost.

 

D. Set by senior management.

 

 

46.Hu Corporation has two operating divisions, A and B. The following information is provided for Division A:  Division B uses the type of product produced by Division A and has approached Division A about buying the product internally. Division B is currently paying $180 to purchase the product from an outside source. If Division A sells internally it can save $5 per unit in variable costs. Assuming Division A is operating at capacity, what price should it charge Division B if the transfer is to be made?   

A. $115

 

B. $195

 

C. $125

 

D. $200

 

 

47.Estes Company has two operating divisions, A and B. The following information is provided for Division A:  Division B uses the type of product produced by Division A and has approached Division A about buying the product internally. Division B is currently paying $300 to purchase the product from an outside source. If Division A sells internally it can save $10 per unit in variable costs. Assuming that Division A has sufficient excess capacity to produce all of the units requested by Division B, which of the following is the lowest price Division A should consider for the transfer?   

A. $300

 

B. $190

 

C. $260

 

D. $250

 

 

48.The Electronics Division of Anton Company reports the following results for 2014:  Anton Company has set a target return on investment (ROI) of 11% for the Electronics Division.The Electronic Division’s return on investment is:   

A. 11.25%.

 

B. 12%.

 

C. 66.7%.

 

D. 18%.

 

 

49.The Electronics Division of Anton Company reports the following results for 2014:  Anton Company has set a target return on investment (ROI) of 11% for the Electronics Division.The Electronic Division’s margin is:   

A. 11.25%.

 

B. 12%.

 

C. 66.7%.

 

D. 18%.

 

 

50.The Electronics Division of Anton Company reports the following results for 2014:  Anton Company has set a target return on investment (ROI) of 11% for the Electronics Division.The Electronic Division’s turnover (asset utilization) is:   

A. 0.1125.

 

B. 0.12.

 

C. 0.667.

 

D. 0.18.