Practice Quiz 12 - Practice Quiz 12 1. The impact on net...

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Practice Quiz 12 1. The impact on net operating income of short-run changes in sales for a segment can be most clearly predicted by analyzing: A) the contribution margin ratio. B) the segment margin. C) the ratio of the segment margin to sales. D) net sales less segment fixed costs. 2. Some investment opportunities that 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. 3. Consider the following three conditions: I. An increase in sales II. An increase in operating assets III. A reduction in expenses Which of the above conditions provide a way in which a manager can improve return on investment? A) Only I B) Only I and II C) Only I and III D) Only II and III 4. Which of the following measures of performance encourages continued expansion by an investment center so long as it is able to earn a return in excess of the minimum required return on average operating assets? A) return on investment B) transfer pricing C) the contribution approach D) residual income 1
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5. For performance evaluation purposes, the variable costs of a service department should be charged to operating departments using: A) the actual variable rate and the budgeted level of activity for the period. B) the budgeted variable rate and the actual level of activity for the period. C) the budgeted variable rate and the budgeted level of activity for the period. D) the actual variable rate and the peak-period or long-run average servicing capacity. 6. Uchimura Corporation has two divisions: the AFE Division and the GBI Division. The corporation's net operating income is $42,000. The AFE Division's divisional segment margin is $15,700 and the GBI Division's divisional segment margin is $175,400. What is the amount of the common fixed expense not traceable to the individual divisions? A) $149,100 B) $57,700 C) $217,400 D) $191,100 7. Toxemia Salsa Company manufactures five flavors of salsa. Last year, Toxemia generated net operating income of $40,000. The following information was taken from last year's income statement segmented by flavor (brackets indicate a negative amount): Wimpy Mild Medium Hot Atomic Contribution margin. $(2,000) $45,000 $35,000 $50,00 0 $162,00
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Practice Quiz 12 - Practice Quiz 12 1. The impact on net...

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