Question : 81. Which of the following statements regarding investment centers incorrect? A. A manager : 1208299

81. Which of the following statements regarding investment centers is incorrect? 
A. A manager of an investment center is responsible for revenues, expenses, and investment capital.
B. Investment centers are commonly found at the lower levels of an organization chart.
C. A manager of an investment center should be accountable for assets, liabilities, earnings.
D. Return on investment and residual income are tools used to assess managers of an investment center.

82. The cellular phone division of Stanton Company had budgeted sales of $800,000 and actual sales of $950,000. Budgeted expenses were $600,000 while actual expenses were $650,000. Based on this information, the responsibility report for the manager of this profit center would show: 
A. A favorable revenue variance.
B. A favorable cost variance.
C. Both a favorable revenue variance and a favorable cost variance.
D. None of the other answers are correct.

83. The concept says that managers should be evaluated on the basis of revenues and expenses they can control is known as the: 
A. Management by exception concept.
B. Responsibility concept.
C. Controllability concept.
D. None of the other answers are correct.

84. Which of the following statements is incorrect? 
A. ROI is calculated as operating income divided by operating assets.
B. Operating assets are assets that are actually used to generate revenue.
C. Non-operating assets are included in the calculation of return on investment.
D. None of the other answers are correct.

85. The manager of Perkins Company’s Housewares Division is not satisfied with the level of return on investment that the division achieved this year. What can be done to improve return on investment? 
A. Increase the investment in assets
B. Increase operating expenses
C. Decrease operating expenses
D. None of the other answers are correct.

86. The term that describes what occurs when a manager does what is in his/her best interests and not what is in the best interests of the company as a whole is known as: 
A. Lowballing.
B. Strategic planning.
C. Suboptimization.
D. None of the other answers are correct.

87. Which of the following statements is correct? 
A. Margin is calculated by dividing operating income by net income.
B. Turnover is a measure of the profits generated from sales.
C. Return on investment can be improved by increasing sales, increasing expenses, or decreasing the asset base.
D. If return on investment increases when sales increase, that change usually is due at least in part to the effect of fixed costs (operating leverage).

88. Which of the following statements about residual income is true? 
A. Residual income = Operating Income – Sales
B. Residual income = Operating Income- Operating Assets
C. Residual income is the amount of income in excess of a target or desired return on investment
D. None of the other answers are correct.

89. Which of the following statements regarding a balanced score cards is correct? 
A. A balanced scorecard includes several different performance measures that can be used to assess how well a business is accomplishing their mission.
B. A balanced score card includes financial performance measures such as ROI.
C. A balanced score card includes non-financial measures such as defect rates or on-time deliveries.
D. All of the other answers are correct.