Question

In: Accounting

53. Blaser Corporation had $1,035,000 in invested assets, sales of $1,266,000, operating income amounting to $203,000...

53.

Blaser Corporation had $1,035,000 in invested assets, sales of $1,266,000, operating income amounting to $203,000 , and a desired minimum return on investment of 14%. The return on investment for Blaser Corporation is

Round the percentage to one decimal place.

a.19.6%

b.23.5%

c.12.8%

d.16.0%

52.

ABC Corporation has three support departments with the following costs and cost drivers:

Support Department Cost Cost Driver
Graphics Production $200,000 number of copies made
Accounting 500,000 number of invoices processed
Personnel 400,000 number of employees

ABC has three operating divisions, Micro, Macro, and Super. Their revenue, cost, and activity information are as follows:

Micro Macro Super
Revenues $700,000 $850,000 $650,000
Direct operating expenses 50,000 70,000 100,000
Number of copies made 20,000 30,000 50,000
Number of invoices processed 700 800 500
Number of employees 130 145 125

The operating income of the Super Division after all support department allocations will be

a.$325,000

b.$550,000

c.$200,000

d.$300,000

51.

ABC Corporation has three support departments with the following costs and cost drivers:

Support Department Cost Cost Driver
Graphics Production $200,000 number of copies made
Accounting 500,000 number of invoices processed
Personnel 400,000 number of employees

ABC has three operating divisions, Micro, Macro, and Super. Their revenue, cost, and activity information are as follows:

Micro Macro Super
Revenues $700,000 $850,000 $650,000
Direct operating expenses 50,000 70,000 100,000
Number of copies made 20,000 30,000 50,000
Number of invoices processed 700 800 500
Number of employees 130 145 125

The support department cost that will be allocated to the Super Division is

a.$100,000

b.$550,000

c.$350,000

d.$125,000

50.

ABC Corporation has three support departments with the following costs and cost drivers:

Support Department Cost Cost Driver
Graphics Production $200,000 number of copies made
Accounting 500,000 number of invoices processed
Personnel 400,000 number of employees

ABC has three operating divisions, Micro, Macro, and Super. Their revenue, cost, and activity information are as follows:

Micro Macro Super
Revenues $700,000 $850,000 $650,000
Direct operating expenses 50,000 70,000 100,000
Number of copies made 20,000 30,000 50,000
Number of invoices processed 700 800 500
Number of employees 130 145 125

The support department cost that will be allocated to the Macro Division is

a.$130,000

b.$175,000

c.$305,000

d.$405,000

49.

ABC Corporation has three support departments with the following costs and cost drivers:

Support Department Cost Cost Driver
Graphics Production $200,000 number of copies made
Accounting 500,000 number of invoices processed
Personnel 400,000 number of employees

ABC has three operating divisions, Micro, Macro, and Super. Their revenue, cost, and activity information are as follows:

Micro Macro Super
Revenues $700,000 $850,000 $650,000
Direct operating expenses 50,000 70,000 100,000
Number of copies made 20,000 30,000 50,000
Number of invoices processed 700 800 500
Number of employees 130 145 125

The support department allocation rate for the Personnel Department is

a.$3,200

b.$3,077

c.$2,758

d.$1,000

48.

ABC Corporation has three support departments with the following costs and cost drivers:

Support Department Cost Cost Driver
Graphics Production $200,000 number of copies made
Accounting 500,000 number of invoices processed
Personnel 400,000 number of employees

ABC has three operating divisions, Micro, Macro, and Super. Their revenue, cost, and activity information are as follows:

Micro Macro Super
Revenues $700,000 $850,000 $650,000
Direct operating expenses 50,000 70,000 100,000
Number of copies made 20,000 30,000 50,000
Number of invoices processed 700 800 500
Number of employees 130 145 125

The support department allocation rate for Graphics Production is

a.$6.66

b.$2.00

c.$0.50

d.$10.00

47.

Which of the following is a measure of a manager's performance working in a profit center?

a.the divisional income statements

b.a balance sheet

c.a budget performance report

d.the return on investment and residual income measures

46.

Responsibility accounting reports for profit centers will include

a.costs only

b.revenues, expenses, and operating income or loss

c.expenses and fixed assets

d.revenues only

45.

The following data are taken from the management accounting reports of Dulcimer Co.:

Division A Division B Division C
Operating income $1,900,000 $1,450,000 $1,450,000
Total support department allocations 1,700,000 1,050,000 1,100,000

If an incentive bonus is paid to the manager who achieved the highest operating income before support department allocations, it follows that

a.Division B's manager is given the bonus

b.Divisions B and C's managers divide the bonus

c.Division A's manager is given the bonus

d.Division C's manager is given the bonus

44.

Operating income for Division L is $250,000, total support department allocations are $400,000, and operating expenses are $2,750,000. The revenues for Division L are

a.$3,000,000

b.$3,400,000

c.$2,750,000

d.$650,000

Solutions

Expert Solution

Answer:

53. A - 19.6%

Return on investment = Operating income / Total invested assets

                                        = $203,000 / $1,035,000

                                        = 19.61%

52. C - $200,000

51. C - $350,000

50. D - $405,000

49. D - $1,000

*Activity based rate = Total overhead cost / Expected use of cost driver

48. B - $2

*Activity based rate = Total overhead cost / Expected use of cost driver


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