1. Carter Company reported the following financial numbers for one of its divisions for the year; average total assets of $4,100,000; sales of $4,525,000; cost of goods sold of $2,550,000; and operating expenses of $1,372,000. Assume a target income of 10% of average invested assets. Compute residual income for the division:

a.$203,000.

b.$193,000.

c.$150,500.

d.$60,300.

e.$197,50

2. The following is a partially completed lower section of a departmental expense allocation spreadsheet for Brickland. It reports the total amounts of direct and indirect expenses for the four departments. Purchasing department expenses are allocated to the operating departments on the basis of purchase orders. Maintenance department expenses are allocated based on square footage.

	Purchasing	Maintenance	Fabrication	Assembly
Operating costs	$32,000	$18,000	$96,000	$62,000
No. of purchase orders			16	4
Sq. ft. of space			3,300	2,700

Required: Compute the amount of Purchasing department expense to be allocated to Assembly.

$6,400.

$9,900.

$8,100.

$14,400.

$25,600.

3. Responsibility accounting performance reports:

a.Become more detailed at higher levels of management.

b.Are usually summarized at higher levels of management.

c.Are equally detailed at all levels of management.

d.Are useful in any format..

e.Are irrelevant at the highest level of management.

4. Allocating joint costs to products using a value basis method is based on their relative:

a.Sales values.

b.Direct costs.

c.Gross margins.

d.Total costs.

e.Variable costs.

5. Which of the following is not one of the perspectives used to analyze performance using the balanced scorecard?

a.Customer

b.Financial/owners

c.Internal process

d.Number of employees

e.Innovation and learning