1. A general calculation method for transfer prices that achieves goal congruence begins with the additional outlay cost per unit incurred because goods are transformed and then

adds the opportunity cost per unit to the organization because of the transfer.

subtracts the opportunity cost per unit to the organization because of the transfer.

adds the sunk cost per unit to the organization because of the transfer.

subtracts the sunk cost per unit to the organization because of the transfer.

adds the sales revenue per unit to the organization because of the transfer.

2.

The difference between the profit margin controllable by a segment manager and the segment profit margin is caused by:

variable operating expenses.

allocated common expenses.

fixed expenses controllable by the segment manager.

fixed expenses traceable to the segment but controllable by others.

sales revenue.

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3. Which of the following is the correct mathematical expression to derive a company's capital turnover?

Sales revenue / invested capital.

Contribution margin / invested capital.

Income / invested capital.

Invested capital / sales revenue.

Invested capital / income.

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4. Sunrise Corporation has a return on investment of 15%. A Sunrise division, which currently has a 13% ROI and $750,000 of residual income, is contemplating a massive new investment that will (1) reduce divisional ROI and (2) produce $120,000 of residual income. If Sunrise strives for goal congruence, the investment:

should not be acquired because it reduces divisional ROI.

should not be acquired because it produces $120,000 of residual income.

should not be acquired because the division's ROI is less than the corporate ROI before the investment is considered.

should be acquired because it produces $120,000 of residual income for the division.

should be acquired because after the acquisition, the division's ROI and residual income are both positive numbers.