ACCTG 225 – Widdison – 1:30 T/Th
Quiz 5A – Chapters 11 & 12 – December 2, 2011
(Circle your TA/section)
You have 25 minutes to complete this quiz.
Show ALL work on these pages, credit may not be given
for correct answers with no support. Attempt all questions.
TRUE/FALSE (1 point each)
T / F
1. Consider a company that has only variable costs. All other things the same, an increase in
unit sales will result in no change in the return on investment.
2. If expenses exceed revenues in a department, then it would be considered a cost center.
3. The use of return on investment as a performance measure may lead managers to make
decisions that are not in the best interests of the company as a whole.
4. The book value of a machine, as shown on the balance sheet, is relevant in a decision
concerning the replacement of that machine by another machine.
MULTIPLE CHOICE (1 point each)
5. Which of the following will not result in an increase in the residual income, assuming other factors
A. An increase in sales.