week 7 p2

Current Attempt in Progress As one moves up to each higher level of managerial responsibility, performance evaluation becomes less important. the responsibility for cost incurrence diminishes. a greater number of costs are controllable. fewer costs are controllable. Current Attempt in Progress A responsibility report should show only those costs that a manager can control. only show variable costs. be prepared in accordance with generally accepted accounting principles. only be prepared at the highest ievel of managerial responsibility. Current Attempt in Progress Top management can control all costs: only controllable costs. some noncontrollable costs and all controllable costs. only noncontrollable costs. Current Attempt in Progress A distinguishing characteristic of an investment center is that the profitability of the center is related to the funds invested in the center. revenues are generated by selling and buying stocks and bonds. interest revenue is the major source of revenues. it is a responsibility center which only generates revenues. Current Attempt in Progress A measure frequently used to evaluate the performance of the manager of an investment center is the rate of return on funds invested in the center. deportmental gross profit. the percentage increase in profit over the previous year. the amount of profit generated. Current Attempt in Progress Return on investment is calculated by dividing contribution margin by sales. controliable margin by sales. controllable margin by average operating assets. contribution margin by average operating assets. Current Attempt in Progress Which one of the following will not increase return on investment? Average operating assets are decreased. An increase in sales. Variable costs are decreased. Variable costs are increased. Current Attempt in Progress Which statement is true? Aninyestment center is only responsible for revenues and expenses. A profit center is evaluated using contribution margin, while an investment center IS evaluated osing RO. An imestiment center is only responsible for its investments. An investment center is responsible for revenues and expenses as well as eaminga return on assets? Current Attempt in Progress The denominator in the formula for return on investment calculation is investment center average operating assets. irvestment center controllable margin. dependent on the specific type of profit center. sales for the period. Current Attempt in Progress For what purpose do companies calculate residual income? To determine whether decentralization is possible or not. To evaluate management performance. To measure company profitsi. To motivatemanagers through possible termination. Current Attempt in Progress To develop the flexible budget, management takes all of the following steps except identify the activity index and the relevant range of activity. yariable costs and determine the budgeted variable cost per unit. fixed costs and determine the budgeted fixed cost per unit. All of these options are steps in developing the flexible budget. Current Attempt in Progress All of the following statements are correct about controllable costs except alf costs are controllable by top management. Current Attempt in Progress Which of the following will cause an increase in ROI? An increase in average operating assets. An increase in variable costs. An increase in controllable fixed costs