13. The costs of the executive management department are Multiple-Choice A. The tax benefit created by inter-department offsetting of revenue and losses. B. The tax shielding effect due to enhancement of leverage funding. C. The costs that are are impossible to allocate to different department. D The costs that Could be pronortic

13. The costs of the executive management department are Multiple-Choice A. The tax benefit created by inter-department offsetting of revenue and losses. B. The tax shielding effect due to enhancement of leverage funding. C. The costs that are are impossible to allocate to different department. D The costs that Could be pronortic

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 2CMA

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Similar questions

A department’s profit is equal to a. the department's revenue less divisional variable costs. b. the department’s revenue less their share of corporate costs only. c. the department’s revenue less divisional variable costs and less investment costs. d. the department’s revenue less divisional variable and less their share of corporate costs.
Differentiate between a cost center, profit center, and investment center. What is the major shortcoming of using operating income as a performance measure for investment centers? Why should the factors under the control of the investment center manager (revenues, expenses, and invested assets) be considered in computing the return on investment? In a decentralized company in which the divisions are organized as investment centers, how could a division be considered the least profitable, even though it earned the largest amount of operating income? Does the concept of decentralization--top managers allowing middle and lower-level managers to make decisions--have application to God's plan for us? In other words, does God make decisions for us or does he allow us to make decisions in our own lives? Is this good or bad? How does using the return on investment facilitate comparability between divisions of decentralized companies?
1) Which of the following is a resource constraint? a) Machine hours available b) Sales commissions c) Cost per unit d) Budgeted overhead 2) Development of a budget ____________. a)Is required by GAAP. b) Is required by tax authorities. c) Enhances communication and coordination among managers. d) Enhances borrowing limit of the firm. 3) Which of the following statements relating to budgeting is NOT true? a) A budget is a formal document that quantifies a company’s plans for achieving its goals. b)Budgets are useful in the control process because they provide a basis for evaluating performance. c) A bottom-up approach to budgeting involves substantial input from lower level managers. d) Most managers believe that budgeting is more successful when a top-down approach rather than a bottom-up approach is used.
Which of the following is not a benefit of budgeting? It allows for coordination between different departments within a firm. It compels managers to develop objectives and to plan allocating resources to achieve the objective. It provides performance evaluation and feedback. It reduces the need for analysis with regard to company expenses.
Are these all true? need it asap TIA. The objective of setting a transfer price is to motivate managers to behave in a manner that will increase the overall company income. Another advantage of decentralized operations is that assets and expenses may be duplicated across divisions. Service department charges are direct expenses to a profit center. When computing spending variances, actual results are compared to flexible budget?
18 Which of the following is not the direct benefit of the budgeting process? Identification of potential bottlenecks or constraints. Goal congruence between the personal goals of managers and the goals of the organization. Payments and completion of taxes Communication throughout the organization.
Which of the following statements best describes a profit center?a. The responsibility for combining the raw materials, direct labor,and other factors of production into a final productb. The authority to make decisions affecting the majordeterminants of profit, including the power to choose its marketsand sources of supplyc. The authority to make decisions affecting the majordeterminants of profit, including the power to choose its markets,sources of supply, and significant control over the amount ofinvested capitald. The authority to make decisions over the most significant costsof operations, including the power to choose the sources of supplye. The authority to provide specialized support to other unitswithin the organization
3. Which of the following statements is most correct about step costs? they have the same behaviour as fixed costs between certain levels of activity they vary in direct proportion to changes in the level of activity they are sunk costs they are used in financial reporting and tax accounting purposes they are excluded from consideration in budgeting
When the manager has the responsibility and authority to make decisions that affect Costs and revenues but no responsibility for or authority over assets invested in the department, the department is called: A. A cost center B. A profit center C. An investment center D. A service department
The high-low method and least-squares regression are used by managers to _____________________. A. decide whether to make or buy a component part B. minimize corporate tax liability C. maximize output D. estimate costs
Departmental direct operating margin is the difference between a departments gross profit and its direct operating expenses.
As manager of department B in MarIeys Manufacturing, based on the costs you identified in the previous exercise for further research, how does this impact the financial performance of your department, and what might be some questions you want to ask or solutions you might propose to Marleys management?