Ch 23

2 October 2022
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12 test answers

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question
A centralized business is one in which a. the owner/manager has little to do with day-to-day business. b. a central location is where the administrative offices are housed. c. all major planning and operating decisions are made by top management. d. all sales are done in one location.
answer
c. all major planning and operating decisions are made by top management.
question
All of the following are advantages of decentralization except a. Decentralization allows managers closest to the operations to make the decisions. b. Decentralization provides managers with excellent training. c. Decentralization delegates authority to top managers. d. Decentralization helps retain managers.
answer
c. Decentralization delegates authority to top managers.
question
Which of the following is a disadvantage of decentralization? a. Managers make decisions in only their areas of expertise. b. It typically provides excellent training for managers. c. Decisions made by one manager may not be the best decision for the entire company. d. Managers work closely with customers.
answer
c. Decisions made by one manager may not be the best decision for the entire company.
question
A cost center manager would only make decisions about which of the following? a. the costs of improperly trained employees b. investments for the center c. sales d. the amount of fixed assets
answer
a. the costs of improperly trained employees
question
The budget performance report received by the plant manager would be a. similar to an annual report. b. a summary of all of the operations in the company. c. a summary of all the plants and departments under his/her responsibility. d. a detailed itemized report for each of the plants.
answer
c. a summary of all the plants and departments under his/her responsibility.
question
Which of the following would operate as a cost center? a. A restaurant b. A manufacturing plant for a large corporation c. A department store d. A doctor's office
answer
b. A manufacturing plant for a large corporation
question
Responsibility accounting reports for profit centers most often take the form of a. statements of cash flows. b. balance sheets. c. income statements. d. None of these choices are correct.
answer
c. income statements.
question
Which of the following would not be considered a service department? a. Production department b. Facilities management department c. Human resources department d. Accounting department
answer
a. Production department
question
Service department charges are a. allocated to profit centers based on the number of employees in the profit center. b. allocated to profit centers based on usage of the service by the profit center. c. allocated to profit centers based on direct operating expenses. d. All of these choices are correct.
answer
b. allocated to profit centers based on usage of the service by the profit center.
question
An investment center has responsibility for a. costs, revenues, and investments. b. investments. c. costs and investments. d. revenues and investments.
answer
a. costs, revenues, and investments.
question
According to the DuPont formula, two factors affect the rate earned on total assets. They are a. sales and assets. b. net income and investment turnover. c. sales and investment turnover. d. profit margin and investment turnover.
answer
d. profit margin and investment turnover.
question
The ratio of income from operations to sales is referred to as a. investment turnover. b. residual income. c. profit margin. d. None of these choices are correct.
answer
c. profit margin.