Question : 108.Of the following choices, which contain both a traceable fixed : 1311870

 

 

108.Of the following choices, which contain both a traceable fixed cost and a common fixed cost?

a.Profit center manager’s salary and timekeeping costs for a responsibility center’s employees.

b.Company president’s salary and company personnel department costs.

c.Company personnel department costs and timekeeping costs for a responsibility center’s employees.

d.Depreciation on a responsibility center’s equipment and supervisory salaries for the center.

 

 

109.Which of the following is not an indirect fixed cost?

a.Company president’s salary

b.Depreciation on the company building housing several profit centers

c.Company personnel department costs

d.Profit center supervisory salaries

 

 

110.A profit center is

a.a responsibility center that always reports a profit.

b.a responsibility center that incurs costs and generates revenues.

c.evaluated by the rate of return earned on the investment allocated to the center.

d.referred to as a loss center when operations do not meet the company’s objectives.

 

 

111.The best measure of the performance of the manager of a profit center is the

a.rate of return on investment.

b.success in meeting budgeted goals for controllable costs.

c.amount of controllable margin generated by the profit center.

d.amount of contribution margin generated by the profit center.

 

 

112.Controllable margin is defined as

a.sales minus variable costs.

b.sales minus contribution margin.

c.contribution margin less controllable fixed costs.

d.contribution margin less noncontrollable fixed costs.

 

 

113.Controllable margin is most useful for

a.external financial reporting.

b.preparing the master budget.

c.performance evaluation of profit centers.

d.break-even analysis.

 

 

114.Which of the following will not result in an unfavorable controllable margin difference?

a.Sales exceeding budget; costs under budget

b.Sales exceeding budget; costs over budget

c.Sales under budget; costs under budget

d.Sales under budget; costs over budget

 

 

115.Given below is an excerpt from a management performance report:

Budget                               ActualDifference

Contribution margin$1,000,000$1,050,000$50,000

Controllable fixed costs$   500,000$   450,000$50,000

The manager’s overall performance

a.is 20% below expectations.

b.is 20% above expectations.

c.is equal to expectations.

d.cannot be determined from information given.

 

 

116.Which of the following are financial measures of performance?

1.Controllable margin

2.Product quality

3.Labor productivity

a.1

b.2

c.3

d.1 and 3

 

 

117.Given below is an excerpt from a management performance report:

Budget                               Actual Difference

Contribution margin$600,000$580,000$20,000  U

Controllable fixed costs$200,000$220,000$20,000  U

The manager’s overall performance

a.is 10% above expectations.

b.is 10% below expectations.

c.is equal to expectations.

d.cannot be determined from the information provided.

 

 

 

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