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chapter 24 ASSESS YOUR PROGRESS > Review Questions 1. Why are direct materials and direct labor asigned to produce 2. Why are manufacturing overhead costs allocated 3. Briefly define activity-based costing 4. What is the formula for calculating the predetermined overhead allocuri ne 5. What are the cont centers in responsibility reports? 6. Define the revenue center in responsibility reports, 7. What do the profit centers in responsibility reports mean? 8. Briefly discuss the utility of promoting goal congruence and coordination 9. Briefly explain financial perspectives in a balanced scotcard. 10. What does transfer price refer to 11. How is the profit margin ratio calculated? 12. How is asset turnover ratio measured 13. What does profitability mean with regard to performance evaluation in investment center? 14. What does efficiency man with regard to performance evaluation in investment centers? 15. What is the purpose of a responsibility accounting system? 16. What is a responsibility center! 17. Lise the four types of responsibility centers and briefly describe cach. 18. What is a performance evaluation system? 19. What are the goals of a performance evaluation system? 20. Explain the difference between a lag indicator and a lead indicatot. 21. How is the use of a balanced Scorecard as a performance evaluation system helpful to companies? 22. What is a key performance indicator? 23. What are the four perspectives of the balanced Scorecard Briefly describe each 24. Explain the difference between a controllable and a noncontrollable cost 25. What is the typical focus of responsibility reports for cost centers, revenue centers and profit centerst 26. What are the two components used to evaluate investment centers? 27. Describe the two ways ROI can be calculated. 28. What does ROI measure 29. What is the biggest disadvantage of using ROI to evaluate investment center 30. How is RI calculated 31. What does Rl measure