Ch10_Guan CM_AISE TB - Chapter 10Decentralization...

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Chapter 10—Decentralization: Responsibility Accounting, Performance Evalu- ation, and Transfer Pricing MULTIPLE CHOICE 1. Responsibility accounting is defined as: a. a system that measures the results of each responsibility center and compares those results with some measure of expected or budgeted outcome. b. a system that defines responsibility by function only. c. a system that measures the results of a manager responsible for revenues and costs. d. a system that measures actual results against a flexible budget. ANS: A PTS: 1 OBJ: 10-1 2. Which of the following departments is likely to be an investment center? a. machining department b. food products division c. personnel department d. accounting department ANS: B PTS: 1 OBJ: 10-1 3. Both revenue center and profit center managers are responsible for achieving a. budgeted revenues. b. budgeted net income. c. budgeted costs. d. budgeted contribution margin. ANS: A PTS: 1 OBJ: 10-1 4. Which of the following departments would NOT be classified as a profit center? a. hardware department b. men's shoes department c. accounting department d. automotive department ANS: C PTS: 1 OBJ: 10-1 5. Which of the following responsibility centers would have a manager responsible for revenues, costs, and investments? a. cost center b. investment center c. profit center d. expense center ANS: B PTS: 1 OBJ: 10-1 6. _______________ are NOT controlled by a manager of a profit center. a. Revenues b. Costs c. Investments d. Profits ANS: C PTS: 1 OBJ: 10-1 This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. This may not be resold, copied, or distributed without the prior consent of the publisher.
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7. The manager of a profit center is responsible for a. delivering a quality product or service at reasonable but minimal cost. b. decisions to invest in capital equipment. c. decisions regarding revenue generation. d. both a and c. ANS: D PTS: 1 OBJ: 10-1 8. The manager of an investment center is responsible for a. decisions regarding costs. b. decisions regarding revenues. c. decisions to invest in assets. d. all of the above. ANS: D PTS: 1 OBJ: 10-1 9. The manager of a cost center is responsible for a. decisions regarding costs. b. decisions regarding revenues. c. decisions to invest in assets. d. both a and b. ANS: A PTS: 1 OBJ: 10-1 10. Which of the following departments would NOT be a cost center? a. advertising department b. city police department c. building and grounds department d. sales department ANS: D PTS: 1 OBJ: 10-1 11. An example of an investment center is a a. production department. b. manufacturing division. c. marketing department. d. credit department. ANS: B
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This note was uploaded on 01/19/2012 for the course ACC 3302 taught by Professor Pence during the Fall '10 term at University of Houston - Downtown.

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Ch10_Guan CM_AISE TB - Chapter 10Decentralization...

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