Question :
101. The amount by which a department’s revenues exceed its direct : 1225571
101. The amount by which a department’s revenues exceed its direct expenses is:
A. Net sales.
B. Gross profit.
C. Departmental profit.
D. Contribution margin.
E. Departmental contribution to overhead.
102. Departmental contribution to overhead is calculated as revenues of the department less:
A. Controllable costs.
B. Product and period costs.
C. Direct expenses.
D. Direct and indirect costs.
E. Joint costs.
103. The Footwear Department of Lee’s Department Store had sales of $188,000, cost of goods sold of $132,500, indirect expenses of $13,250, and direct expenses of $27,500 for the current period. The Footwear Department’s contribution to overhead as a percent of sales is:
A. 7.8%.
B. 14.9%.
C. 29.5%.
D. 66.7%.
E. 85.4%.
104. Mach Co. operates three production departments as profit centers. The following information is available for its most recent year. Department 1’s contribution to overhead as a percent of sales is:
A. 8%.
B. 40%.
C. 20%.
D. 30%.
E. 12%.
105. Mach Co. operates three production departments as profit centers. The following information is available for its most recent year. Which department has the greatest departmental contribution to overhead and what is the amount contributed?
A. Dept. 3; $400,000.
B. Dept. 1; $1,000,000.
C. Dept. 2; $100,000.
D. Dept. 3; $250,000.
E. Dept. 2; $150,000.
106. For an investment center, the hurdle rate is:
A. The cost of obtaining financing.
B. The desired return on investments.
C. The difference between the projected rate and the earned rate.
D. Not evaluated in determining the performance of an investment center.
E. Not important to management.
107. A system of performance measures, including nonfinancial measures, used to assess company and division manager performance is:
A. Hurdle rate.
B. Return on investment.
C. Balanced scorecard.
D. Residual income.
E. Investment turnover.
108. Abbe Company reported the following financial numbers for one of its divisions for the year; average total assets of $4,100,000; sales of $4,525,000; cost of goods sold of $2,550,000; and operating expenses of $1,372,000. Compute the division’s return on assets:
A. 30.3%.
B. 23.6%.
C. 13.3%.
D. 10.4%.
E. 14.7%.
109. Abbe Company reported the following financial numbers for one of its divisions for the year; average total assets of $4,100,000; sales of $4,525,000; cost of goods sold of $2,550,000; and operating expenses of $1,372,000. Assume a target income of 10% of average invested assets. Compute residual income for the division:
A. $203,000.
B. $193,000.
C. $150,500.
D. $60,300.
E. $197,500.
110. Yoho Company reported the following financial numbers for one of its divisions for the year; average total assets of $5,800,000; sales of $5,375,000; cost of goods sold of $3,225,000; and operating expenses of $1,147,000. Compute the division’s return on assets:
A. 18.6%.
B. 21.3%.
C. 17.3%.
D. 10.4%.
E. 14.7%.
