ACCT6281_Exam_15_16

ACCT6281_Exam_15_16 - Name_ Bus 220 Quiz Chapters Garrison...

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Name____________________________________________________ Bus 220 Quiz Chapters Garrison 12 and 13 1. Hayworth Company has just segmented last year's income statements into its ten product lines. The chief executive officer (CEO) is curious as to what effect dropping one of the product lines at the beginning of last year would have had on overall company profit. What is the best number for the CEO to look at to determine the effect of this elimination on the net operating income of the company as a whole? A) the product line's sales dollars. B) the product line's contribution margin. C) the product line's segment margin. D) the product line's segment margin minus an allocated portion of common fixed expenses. 2. If a cost is a common cost of the segments on a segmented income statement, the cost should: A) be allocated to the segments on the basis of segment sales. B) not be allocated to the segments. C) excluded from the income statement. D) treated as a product cost rather than as a period cost. 3. Some investment opportunities which should be accepted from the viewpoint of the entire company may be rejected by a manager who is evaluated on the basis of: A) return on investment. B) residual income. C) contribution margin. D) segment margin. 4. A company is analyzing the performance of responsibility centers. Controllable costs would be included in the performance reports of which of the following types of responsibility centers? Investment centers Profit Centers A) No No B) No Yes C) Yes Yes D) Yes No 5. Brummitt Corporation has two divisions: the BAJ Division and the CBB Division. The corporation's net operating income is $10,700. The BAJ Division's divisional segment margin is $76,100 and the CBB Division's divisional segment margin is $42,300. What is the amount of the common fixed expense not traceable to the individual divisions? A) $86,800 B) $107,700 C) $53,000 D) $118,400 6. Given the following data: Average operating assets. .................. $250,000 Total liabilities. .................................... $100,000 Sales. ................................................. $600,000 Contribution margin. ........................... $150,000 Net operating income. ........................ $30,000 Return on investment (ROI) would be: A) 5% B) 12% C) 25% D) 60% 7. Division T of Clocker Company makes a timer which it sells for $30 to outside customers. The division has supplied the following data concerning the timer: Monthly capacity. ................................ 12,000 timers Variable cost per unit. ......................... $15 Fixed cost per unit. ............................. $10 Presently, Division S of Clocker Company is currently buying 5,000 similar timers each month from an overseas supplier at $27 each. Division S would like to acquire its timers from Division T if the price is right.
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7. contd. Suppose Division T is operating at capacity and can sell all of the timers it produces to outside
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This note was uploaded on 11/28/2009 for the course BUS 281 taught by Professor Goldberg during the Spring '09 term at Northeastern.

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ACCT6281_Exam_15_16 - Name_ Bus 220 Quiz Chapters Garrison...

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