Question :
33.Carrier Corporation produces heating and air conditioning equipment at a : 1259674
33.Carrier Corporation produces heating and air conditioning equipment at a number of plants throughout the United States including one in Syracuse, New York. Carrier should evaluate its Syracuse plant as:
A. A cost center.
B. An investment center.
C. A profit center (other than an investment center).
D. A committed center.
34.Carrier Corporation’s Syracuse plant is organized into Air Conditioning and Heating Products divisions. The management of the Syracuse plant should evaluate the Heating Products division as:
A. A cost center.
B. An investment center.
C. A profit center (other than an investment center).
D. A revenue center.
35.John Thomas is the manager of materials movement for the Syracuse plant of Carrier Corporation. Thomas should be evaluated as manager of:
A. A cost center.
B. An investment center.
C. A profit center (other than an investment center).
D. Human resources under his supervision.
36.The human resources department of a large company would be considered:
A. A cost center.
B. A profit center.
C. An investment center.
D. A revenue center.
37.The bookstore of a university would be considered:
A. A cost center.
B. A profit center.
C. An investment center.
D. A revenue center.
38.Which of the following is not a valid reason for developing responsibility center information?
A. Responsibility center information is useful in deciding how to allocate resources among segments of the business.
B. Separately measuring the revenue and expenses of each responsibility center is a necessary step in developing financial statements for the business entity viewed as a whole.
C. Responsibility center information is useful in evaluating the performance of segment managers.
D. Responsibility center information helps management to quickly identify sections of the business that are performing poorly.
39.The term responsibility center reflects the idea that the “centers” of a business usually are defined in a manner such that each center is:
A. Responsible for earning a specified amount of profit.
B. Responsible for all business operations in a specific region.
C. Under the control of a specified center manager.
D. Approximately the same size.
40.In a responsibility accounting system, the recording of revenue and costs begins with the:
A. Most profitable segments of the business.
B. Least profitable segments of the business.
C. Broadest areas of management responsibility.
D. Smallest areas of management responsibility.
41.Responsibility accounting systems measures the performance of:
A. The entire company.
B. Each center individually.
C. Both the entire company and each center individually.
D. Neither the entire company nor each center individually.
42.Successful operation of a responsibility accounting system requires all of the following except:
A. Budgets prepared for each responsibility center.
B. The use of a bonus pool based on ROA (return on assets).
C. An accounting system which measures the performance of each responsibility center.
D. The preparation of timely performance reports.
