Question 1

Some organizations use internal support departments to provide like services to several divisions or departments within an organization. Which of the following would probably not lend itself as a support department?

Accepted Answer

Inventory Control Department is more likely to be integrated within specific operational departments rather than serving as a centralized support department for the entire organization. This is because inventory needs can vary significantly between different divisions or departments, requiring specialized management that aligns with the specific operational activities of each division.

Question 2

Operating expenses directly traceable to or incurred for the sole benefit of a specific department and usually subject to the control of the department manager are _____ expenses.

Accepted Answer

Direct operating expenses are costs that can be directly attributed to a specific department or segment of a business and are typically under the control of the department manager. These expenses are directly related to the day-to-day operations of a specific department.

Question 3

The costs of services charged to a profit center on the basis of its use of those services are

Accepted Answer

Support department allocations are costs charged to a profit center based on its use of services provided by other departments within the organization, such as IT support, human resources, or facilities management. These allocations help in accurately assessing the profit center's performance by including the cost of internal services it consumes.

Question 4

Operating income of the Pierce Automobile Division is $2,225,000. If operating income before support department allocations is $3,250,000,

Accepted Answer

The difference between operating income before support department allocations ($3,250,000) and operating income after allocations ($2,225,000) is the total support department allocations, which is $1,025,000.

Question 5

The term used to describe expenses that are incurred by a specific department is _____ expenses.

Accepted Answer

The answer of The term used to describe expenses that...

Question 6

Which of the following expenses incurred by a department store would be a direct expense of the Sporting Goods Department?

Accepted Answer

Commissions earned by Sporting Goods Department sales clerks are directly related to the sales activities of that specific department, making it a direct expense. Other options are either indirect expenses or not specifically related to the Sporting Goods Department's operations.

Question 7

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

Accepted Answer

The answer of Which of the following is a measure...

Question 8

ABC Corporation has three support departments with the following costs and cost drivers:  ABC has three operating divisions, Micro, Macro, and Super. Their revenue, cost, and activity information are as follows:  ​
-The support department allocation rate for the Accounting Department is

Accepted Answer

The answer of ABC Corporation has three support departments with...

Question 9

Which of the following would not be considered an internal centralized support department?

Accepted Answer

Manufacturing Department is not an internal centralized support department because it is directly involved in the production of goods or services.

Question 10

In a profit center, the manager has responsibility and authority for making decisions that affect

Accepted Answer

A profit center manager is responsible for generating revenues and controlling costs to maximize profit, but does not have authority over long-term liabilities, assets, or investments.

Question 11

Division A reported operating income of $975,000 and total support department allocations of $675,000. As a result,

Accepted Answer

Operating income before support department allocations is calculated by adding the support department allocations back to the reported operating income. Therefore, $975,000 + $675,000 = $1,650,000.

Question 12

Operating income for Division H is $220,000, and operating income before support department allocations is $975,000. As a result,

Accepted Answer

Operating income before support department allocations is $975,000, and after allocations, it is $220,000. The difference, $755,000, represents the total support department allocations.

Question 13

In evaluating the profit center manager, the operating income should be compared

Accepted Answer

Comparing the operating income to a budget allows for an assessment of how well the profit center manager is controlling costs and generating revenue against planned targets. This comparison is directly related to the manager's performance and decision-making.

Question 14

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

Accepted Answer

Operating income is calculated as Revenues - Operating Expenses - Support Department Allocations. Rearranging gives Revenues = Operating Income + Operating Expenses + Support Department Allocations = $250,000 + $2,750,000 + $400,000 = $3,400,000.

Question 15

Which of the following is a measure of a cost center manager's performance?

Accepted Answer

Budget performance reports are used to evaluate a cost center manager's performance by comparing actual costs incurred to budgeted costs. Cost centers focus on controlling costs rather than generating revenues, making budget adherence a key performance metric.

Question 16

ABC Corporation has three support departments with the following costs and cost drivers:  ABC has three operating divisions, Micro, Macro, and Super. Their revenue, cost, and activity information are as follows:  ​
-The support department allocation rate for Graphics Production is

Accepted Answer

The answer of ABC Corporation has three support departments with...

Question 17

In a profit center, the department manager has responsibility for and the authority to make decisions that affect

Accepted Answer

In a profit center, the department manager has the responsibility and authority to make decisions that affect both costs and revenues for the department or division. This means that the manager can make decisions that impact the money coming in and going out of the center in order to maximize profitability. Additionally, the manager is also accountable for the overall performance of the center, including the assets invested in it.

Question 18

To compute operating income, total support department allocations are

Accepted Answer

Operating income is calculated by subtracting total support department allocations from the operating income before these allocations. This reflects the impact of support department costs on the operational profitability of the business.

Question 19

Responsibility accounting reports for profit centers will include

Accepted Answer

Responsibility accounting for profit centers includes reports on revenues, expenses, and the resulting operating income or loss. This is because profit centers are responsible for both generating revenue and controlling costs to derive profit.

Question 20

The following data are taken from the management accounting reports of Dulcimer Co.:  If an incentive bonus is paid to the manager who achieved the highest operating income before support department allocations, it follows that

Accepted Answer

The answer of The following data are taken from the...

Quiz 24: Evaluating Decentralized Operations

Some organizations use internal support departments to provide like services to several divisions or departments within an organization. Which of the following would probably not lend itself as a support department?

Operating expenses directly traceable to or incurred for the sole benefit of a specific department and usually subject to the control of the department manager are _____ expenses.

The costs of services charged to a profit center on the basis of its use of those services are

Operating income of the Pierce Automobile Division is $2,225,000. If operating income before support department allocations is $3,250,000,

The term used to describe expenses that are incurred by a specific department is _____ expenses.

Which of the following expenses incurred by a department store would be a direct expense of the Sporting Goods Department?

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

ABC Corporation has three support departments with the following costs and cost drivers: ABC has three operating divisions, Micro, Macro, and Super. Their revenue, cost, and activity information are as follows: -The support department allocation rate for the Accounting Department is

Which of the following would not be considered an internal centralized support department?

In a profit center, the manager has responsibility and authority for making decisions that affect

Division A reported operating income of $975,000 and total support department allocations of $675,000. As a result,

Operating income for Division H is $220,000, and operating income before support department allocations is $975,000. As a result,

In evaluating the profit center manager, the operating income should be compared

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

Which of the following is a measure of a cost center manager's performance?

ABC Corporation has three support departments with the following costs and cost drivers: ABC has three operating divisions, Micro, Macro, and Super. Their revenue, cost, and activity information are as follows: -The support department allocation rate for Graphics Production is

In a profit center, the department manager has responsibility for and the authority to make decisions that affect

To compute operating income, total support department allocations are

Responsibility accounting reports for profit centers will include

The following data are taken from the management accounting reports of Dulcimer Co.: If an incentive bonus is paid to the manager who achieved the highest operating income before support department allocations, it follows that

Quiz 24: Evaluating Decentralized Operations

Some organizations use internal support departments to provide like services to several divisions or departments within an organization. Which of the following would probably not lend itself as a support department?

Operating expenses directly traceable to or incurred for the sole benefit of a specific department and usually subject to the control of the department manager are _____ expenses.

The costs of services charged to a profit center on the basis of its use of those services are

Operating income of the Pierce Automobile Division is $2,225,000. If operating income before support department allocations is $3,250,000,

The term used to describe expenses that are incurred by a specific department is _____ expenses.

Which of the following expenses incurred by a department store would be a direct expense of the Sporting Goods Department?

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

ABC Corporation has three support departments with the following costs and cost drivers: ABC has three operating divisions, Micro, Macro, and Super. Their revenue, cost, and activity information are as follows: ​ -The support department allocation rate for the Accounting Department is

Which of the following would not be considered an internal centralized support department?

In a profit center, the manager has responsibility and authority for making decisions that affect

Division A reported operating income of $975,000 and total support department allocations of $675,000. As a result,

Operating income for Division H is $220,000, and operating income before support department allocations is $975,000. As a result,

In evaluating the profit center manager, the operating income should be compared

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

Which of the following is a measure of a cost center manager's performance?

ABC Corporation has three support departments with the following costs and cost drivers: ABC has three operating divisions, Micro, Macro, and Super. Their revenue, cost, and activity information are as follows: ​ -The support department allocation rate for Graphics Production is

In a profit center, the department manager has responsibility for and the authority to make decisions that affect

To compute operating income, total support department allocations are

Responsibility accounting reports for profit centers will include

The following data are taken from the management accounting reports of Dulcimer Co.: If an incentive bonus is paid to the manager who achieved the highest operating income before support department allocations, it follows that

ABC Corporation has three support departments with the following costs and cost drivers: ABC has three operating divisions, Micro, Macro, and Super. Their revenue, cost, and activity information are as follows: -The support department allocation rate for the Accounting Department is

ABC Corporation has three support departments with the following costs and cost drivers: ABC has three operating divisions, Micro, Macro, and Super. Their revenue, cost, and activity information are as follows: -The support department allocation rate for Graphics Production is