TRUE OR FALSE

1. The process of measuring and reporting operating data by responsibility centers is termed responsibility accounting.

2. The rates at which centralized services are charged to each division are called support department allocation rates.

3. The ratio of sales to investment is termed the return on investment.

4. If operating income for a division is $6,000, invested assets are $25,000, and sales are $30,000, the profit margin is 20%.

5. If divisional operating income is $75,000, invested assets are $737,500, and the minimum return on invested assets is 6%, the residual income is $36,750.