1. The balanced scorecard measures financial and nonfinancial performance of a business. The balanced scorecard measures four areas. Identify one of the following that is not included as a performance measurement.

a) Internal Process

b) Financial

c) Innovation and Learning

d) Employees

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 termed:

a) Miscellaneous administrative expenses

b) Direct expenses

c) Indirect expenses

d) Fixed expenses

3. In an investment center, the manager has responsibility and authority for making decisions that affect:

a) Costs

b) Revenues

c) Assets

d) Costs, revenues, and assets

4. Division X of O' Blarney Company has sales of $300,000, cost of goods sold of $120,000, operating expenses of $58,000, and invested assets of $150,000.

What is the profit margin for Division X?

a) 81.3%

b) 20.2%

c) 40.7%

d) 60%

5. Mandolin Company has two divisions. Division A is interested in purchasing 10,000 units from Division B. Capacity is available for Division B to produce these units. The per unit market price is $30 per unit, with a variable cost of $17. The manager of Division A has offered to purchase the units at $15 per unit. In an effort to make this transfer price beneficial for the company as a whole, what is the range of prices that should be used during negotiations between the two divisions?

a) $15 to $30

b) $15 to $17

c) Over $30

d) $17 to $30