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Responsibility accounting is the concept that says: 17. Managers should be held entirely responsible for all investment decisions that impact the particular segment in which
"Responsibility accounting" is the concept that says: 17. Managers should be held entirely responsible for all investment decisions that impact the particular segment in which they are in charge. a. b. Managers should be held responsible for only those things under their control. Managers should never be held entirely responsible for things that happen within the c. particular segment in which they are in charge. Managers should be responsible for both revenues and costs of their particular segment. d. THE FOLLOWING APPLIES TO THE NEXT 4 QUESTIONS Assume division 1 of the XYZ Company had the following results last year. Management's required rate of return (hurdle rate) is 8% Sales (CR) Operating Income (CI) Total assets (CA) $5,000,000 1,000,000 10,000,000 18. What is the division's margin? A. 5% B. 10% C. 20% D. 50% 19. What is the division's turnover? A. 5% B. 10% C. 20% 24. ABC Company sells a variety of drink and food products including potato chips and sodas. The segmented income statements for these two products (profit centers) are as follows: Total $1,700,000 515.000 1,185,000 280.000 905,000 200,000 $705.000 Soda Chip $900,000 315.000 585,000 160,000 425,000 100,000 $325,000 Sales Variable costs Contribution margin Directly traceable fixed costs Segment margin Allocated (equally) common fixed costs Net income $800,000 200,000 600,000 120.000 480,000 100,000 $380,000 ABC Company's management is considering a special advertising campaign to increase sales in the Soda Profit Center. The advertising campaign will cost $30,000 and should increase sales of the Soda Profit Center by 25%. What will be the overall net effect on the company's net income? Increase of $170,000 a. Increase of $150,000 b. Increase of $120,000 c. Increase of $200,000 d. Another name for absorption costing is 25. a. Full costing. b. Direct costing c. Job order costing. d. Fixed costing. 26. Another name for variable costing is a. Full costing. b. Direct costing. Job order costing. C
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