Question : 11.              The most useful measure for evaluating the performance of : 1311572

11.              The most useful measure for evaluating the performance of the manager of an investment center is

a.              contribution margin.

b.              controllable margin.

c.              return on investment.

d.              income from operations.

12.              Which of the following capital budgeting techniques takes the time value of money into consideration?

a.              Annual rate of return

b.              Internal rate of return

c.              Net present value

d.              Both (b) and (c) above

13.              The cost classification scheme most relevant to responsibility accounting is

a.              controllable vs. uncontrollable.

b.              fixed vs. variable.

c.              semivariable vs. mixed.

d.              direct vs. indirect.

14.              TJ Enterprises’ equipment account increased $43,000 during the period; the related accumulated depreciation increased $14,000. New equipment was purchased at a cost of $58,000 and used equipment was sold at a loss of $4,000. Depreciation expense was $19,000. How much is proceeds from the sale of the used equipment?

a.              $10,000

b.              $15,000

c.              $6,000

d.              $14,000

15.              A flexible budget

a.              is also called a static budget.

b.              can be considered a series of related static budgets.

c.              can be prepared for sales or production budgets, but not for an operating expense budget.

d.              typically uses an activity index different from that used in developing the predetermined overhead rate.

Use the following information for questions 16 and 17.

DyanChrome estimates its sales at 12,000 units in the first quarter with an increase by 600 units each quarter over the year. It desires an ending inventory of finished goods equal to 20% of the next quarter’s sales. Each unit sells for $30. Forty percent of sales are on account, with the remainder being cash sales. Credit customers pay 90% during the quarter the sale was made and the balance during the following quarter.

16.              How much are budgeted cash collections for the third quarter?

a.              $395,280

b.              $380,160

c.              $356,400

d.              $396,000

17.              Production in units for the third quarter should be budgeted at

a.              13,080

b.              13,320

c.              15,760

d.              12,600

18.              Shari Company incurs the following costs in producing 5,000 units of product:

Direct materials$30,000

Direct labor22,000

Variable manufacturing overhead17,000

Fixed manufacturing overhead12,000

An outside supplier has offered to supply the 5,000 units at $14.00 each. Of the fixed costs, $4,000 of the fixed costs would be eliminated if the offer is accepted. Acceptance will result in a

a.              savings of $3,000.

b.              loss of $11,000.

c.              savings of $7,000.

d.              loss of $1,000.

19.              Vandergrass Company has a production process where two products result from a joint processing procedure; both can be sold immediately or processed further. Which of the products should be processed further?

Allocated              AdditionalNew

Product              Joint CostSelling PriceProcessing CostSelling Price

A              $70$80$12$95

B              4056862

a.              A

b.              B

c.              Both

d.              Neither

20.              Which of the following combinations presents correct examples of liquidity, profitability, and solvency ratios, respectively?

Liquidity              ProfitabilitySolvency

a.              Inventory turnoverInventory turnoverTimes interest earned

b.              Current ratioInventory turnoverDebt to total assets

c.              Receivables turnoverReturn on assetsTimes interest earned

d.              Quick ratioPayout ratioReturn on assets