Question

1. Which of the following is not an advantage of decentralization?
   1. Lower level managers are trained for increased responsibilities
   2. Managers are motivated to improve productivity
   3. Upper-level managers are able to concentrate on important decisions
   4. All of these are advantages of decentralization

2. When comparing EOQ and JIT inventory systems, which of the following statements is false?
   1. The EOQ system assumes a variable order quantity
   2. The EOQ system focuses on acquisition and holding costs
   3. JIT argues that inventory investments should be minimized
   4. The EOQ approach takes the viewpoint that some inventory is necessary
   5. JIT argues that safety stocks are unnecessary

3. Which of the following statements regarding responsibility accounting is not correct?
   1. It is most effective in a centralized business structure where senior managers exert control over various segments of a company’s operations
   2. It calls for the preparation of responsibility reports listing the budgeted and actual revenue and/or expense items over which the manager has control
   3. It requires top management to focus on long-term planning for the entire company and delegates the authority for implementing that plan to lower levels of management
   4. It calls for the preparation of report containing detailed information regarding the performance of a responsibility center

4. A factory that makes a part has no idle capacity. The factory’s opportunity cost of making this part is equal to?
   1. The fixed manufacturing cost per unit
   2. Zero
   3. The total manufacturing cost per unit
   4. The contribution margin per unit of a product that is not made
   5. The variable manufacturing cost per unit

Answer 1

Which of the following is not an advantage of decentralization?

4. · All of these are advantages of decentralization

Decentralization is assigning responsibility to lower level managers

When comparing EOQ and JIT inventory systems, which of the following statements is false?

a.The EOQ system assumes a variable order quantity

EOQ stands for Economic order quantity and is a fixed quantity

Which of the following statements regarding responsibility accounting is not correct?

a.It is most effective in a centralized business structure where senior managers exert control over various segments of a company’s operations

Responsibility accounting is when responsibilities are assigned to people, not suitable for centralized structure

A factory that makes a part has no idle capacity. The factory’s opportunity cost of making this part is equal to?

4. The contribution margin per unit of a product that is not made

Since the contribution margin will be lost