Question :
21. The term “strategic business unit” often used to describe a(n): A. investment : 1291622
21. The term “strategic business unit” is often used to describe a(n): A. investment center.B. revenue center.C. profit center.D. cost center.
22. Which of the following statements is true regarding a company’s segment margin? A. It is primarily used to make short-term decisions such as cost-volume-profit (CVP) analysis and special order decisions.B. It ignores all fixed costs.C. It is primarily a measure of long-term profitability.D. It should not be used to make decisions on whether or not to drop a product line.
23. In the decision-making process, which of the following situations would be best addressed by managers using a segmented income statement rather than a contribution margin format income statement? A. The decision on whether or not a one-time special order for a customer should be accepted.B. The calculation of the break-even point for the upcoming month.C. The decision on whether or not an entire product line should be discontinued.D. The decision on whether or not to process a product further or sell “as is.”
24. Which of the following items is often mostdifficult to allocate to a particular segment? A. Traceable fixed costsB. Sales revenueC. Common fixed costsD. Variable costs
25. Costs that can not be traced or reasonably allocated to a particular segment are called: A. variable costs.B. common costs.C. segment costs.D. fixed costs.
26. Which of the following items is not part of the calculation for segment margin? A. Contribution marginB. Traceable fixed expensesC. Common costsD. Variable costs
27. Which of the following statements is true regarding the allocation of a company’s indirect fixed costs? A. Indirect fixed costs should always be traced to a particular segment.B. If the indirect fixed cost would go away should a particular segment be eliminated, then the indirect fixed cost should be traced to that particular segment.C. Indirect fixed costs should never be allocated to a particular segment.D. Indirect fixed costs should not benefit more than one particular segment.
28. Finley Company has its company headquarters based in Raleigh, North Carolina, and has six individual retail stores spread throughout North Carolina and Virginia. Which of the following costs would most likely be treated as a common cost for segmented reporting purposes? A. Lease costs for the company headquarters.B. Property tax costs for the Virginia stores.C. Direct labor costs for the North Carolina stores.D. Utilities costs for the both the Virginia and North Carolina stores.
29. Pennington ProductsPennington Products has two product lines: R-100 and R-200. Revenue and cost information for each of the product lines are as follows:
R-100
R-200
Selling price per unit
$50
$70
Variable costs per unit
20
35
Traceable fixed expenses
$275,000
$350,000
Pennington has common fixed expenses of $380,000 per year. Last year, the company produced and sold 35,000 units of R-100 and 25,000 units of R-200. Refer to the Pennington Products information above. What is the segment margin of the R-100 product line? A. $775,000B. $690,000C. $525,000D. $400,000
30. Pennington ProductsPennington Products has two product lines: R-100 and R-200. Revenue and cost information for each of the product lines are as follows:
R-100
R-200
Selling price per unit
$50
$70
Variable costs per unit
20
35
Traceable fixed expenses
$275,000
$350,000
Pennington has common fixed expenses of $380,000 per year. Last year, the company produced and sold 35,000 units of R-100 and 25,000 units of R-200. Refer to the Pennington Products information above. What is the segment margin ratio of the R-200 product line? A. 50%B. 30%C. 60%D. 20%
