76 the performance evaluation of a profit center is typically based on its a segment 4308027

76 the performance evaluation of a profit center is typically based on its a segment 4308027

76) The performance evaluation of a profit center is typically based on its

A) segment margin.

B) static budget variance.

C) return on investment.

D) return on assets.

77) Rider Company had the following financial results for last month. Which type of responsibility center do these financial results reflect?

Gretzel Subunit

Actual

Flexible BudgetFlexible Budget

Variance

(U or F)

% of Variance

(U or F)

Direct materials$30,000$28,000$2,000 U 7.14% U

Direct labor15,00014,0001,000 U7.14% U

Indirect labor25,00022,0003,000 U13.64% U

Utilities12,00010,0002,000 U20.0% U

Depreciation25,00025,00000

Repairs and

Maintenance

4,000

5,000

1,000 F

20.00% F

Total$111,000$104,000$7,000 U6.73% U

A) Cost center

B) Profit center

C) Investment center

D) Revenue center

78) Corbin Company had the following financial results for last month. What type of responsibility center do these financial results reflect?

One store

Actual

Flexible BudgetFlexible Budget

Variance

(U or F)

% of Variance

(U or F)

Revenues$220,000$200,000$20,000 F10.00% F

Operating Expenses 80,00070,00010,000 U14.29% U

Income from operations before service dept. charges

140,000

130,000

10,000 F

7.69% F

Service department charges40,00040,00000

Income from operations100,00090,00010,000 F11.11% F

A) Revenue center

B) Investment center

C) Profit center

D) Cost center

79) Elaina Company had the following financial results for last month. What type of responsibility center do these results reflect?

Selle Co. –

Subunit X

Revenue by

Product

Actual

Flexible

Budget

Variance

Flexible

Budget

Sales

Volume

Variance

Static

(Master)

Budget

WD-40$630,000$10,000 F$620,000$20,000 F$600,000

WD-60520,00030,000 U 550,00040,000 F510,000

WD-80125,000 5,000 U130,00010,000 U140,000

QD-40225,00025,000 F200,00040,000 U240,000

QD-60425,0005,000 F420,000 20,000 F400,000

Total$1,925,000$5,000 F$1,920,000$30,000 F$1,890,000

A) Profit center

B) Revenue center

C) Investment center

D) Cost center

80) The duties of an investment center manager are similar to those of a CFO of an entire company.

81) The duties of an investment center manager are similar to those of a CEO.

82) Companies evaluate investment center performance the way they evaluate profit center performance.

83) Return on Investment (ROI) is defined as operating income divided by current assets.

84) The capital turnover is operating income divided by sales.

85) Residual Income (RI) equals operating income less minimum acceptable income.

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