evaluated only on ROI.
Q: Which of the following is not a qualitative decision that should be considered in an outsourcing…
A: Outsourcing refers to receiving of services from another company in order to fulfill out company…
Q: A very key concept in managerial accounting is how costs "behave", either fixed or variable. Once we…
A: Fixed Cost: These are costs that will remain the same irrespective of production or number of units…
Q: For what purpose should the managerial accountant be careful to not use joint cost allocations?
A: Joint costs: The total costs incurred prior to the split-off point, where the joint products are…
Q: Why are cost centers considered to be more appropriate than profit centers for production…
A:
Q: For what decisions is the manager of a cost center not responsible?
A: Responsibility of Cost Centre Manager The main responsibility of the cost center managers to…
Q: What managerial decisions are influenced by differential analysis reports? How do these reports help…
A: Differential Analysis: A differential analysis is a tool to analyze the revenues and costs…
Q: Senior management is concerned that solely focus on ROI in measuring divisional performance could…
A: When we talk about the metrics and performance indicators that can be used to measure the success of…
Q: In a management setting, does Transfer Pricing affects the previous topics - Absorption & Variable,…
A: Transfer pricing is the strategy which is adopted by the company in order to charge the amount for…
Q: A profit center manager often also supervises revenue and cost center managers. True or False True…
A: Solution 1: True, A profit center manager often also supervise revenue and cost center manager…
Q: When it comes to cost behavior,
A: Cost Behavior is that the amendment within the behavior of a price (or costs) thanks to a amendment…
Q: What of the following is NOT a Benefit of Activity Based Management? a.It assists in the budgeting…
A: Introduction:- Activity Based Management analyzing a company's business activities through…
Q: In Management Accounting, what is the transfer price? What three areas does transfer price affect in…
A: SOLUTION- TRANSFER PRICE- IT IS THE PRICE THAT RELATED PARTIES CHARGED TO EACH OTHER. ON THE OTHER…
Q: Why might goal-congruence issues arise when managers use an EOQ model to guide decisions on how much…
A:
Q: When evaluating the performance of a manager, why shouldfixed costs be divided into the categories…
A: Controllable expenditure: Controllable expenditure is an expenditure that is directly controllable…
Q: What questions should managers answer when considering outsourcing?
A:
Q: Explain why it is important in performance evaluation to distinguish between investment centers and…
A: Return on investment (ROI): Return on investment evaluates how efficiently the assets are used in…
Q: Synthesized data to explain the concept of ROI, how the use of an activity-based costing system can…
A: Ratio analysis is a tool used by the financial analyst to measure the financial performance of the…
Q: Describe the concept of management by exception and explain how standard costs help managers apply…
A:
Q: Discuss how the behavior of division managers is likely to be affected by the use of: a. Return on…
A: Division managers provide leadership and assistance to their team members. It provide guidance and…
Q: Which of the following is not a goal of performance evaluation systems? a. Promoting goal congruence…
A: Answer:
Q: 1. Discuss whether the manager of Bell Division should be evaluated only on ROI? 2. Provide two…
A: Financial ratios: The ratios calculated by using the various line items reported in the financial…
Q: A variety of quantitative measures are used to evaluate employee performance, including standard…
A: a. SCS (Standard Cost System): A system where the costs required for production are estimated. The…
Q: What disadvantages do you see if the chief executive officer (CEO) is primarilyconcerned with…
A: Return on investment is the amount of revenue that is produced on a venture. By measuring the return…
Q: In a management setting, does Transfer Pricing affects Absorption & Variable, Budgeting, and…
A: Transfer Pricing Transfer prices are required when profit centres are utilised to determine the…
Q: “When evaluating a company’s performance on the time dimension, managers should only consider…
A:
Q: A good performance measurement system should have the following characteristics: It should be based…
A: Good performance measurement must be established because the absence of a good performance…
Q: Is Standard costing still a useful tool for the Management accountant? How could it be adapted to…
A: Costing Accounting- A cost accounting system is a type of perpetual inventory accounting system that…
Q: he costs referred to as “controllable costs” are a. Costs which management decides to incur in…
A: Solution: The costs referred to as “controllable costs” are "Costs which are likely to respond to…
Q: Which of the following is not a goal of performance evaluation systems? Promoting goal congruence…
A: Answer:
Q: Identify and discuss arguments that individual product managers may put forward to support their…
A: Preferred Revenue Allocation method is a revenue allocation method in which managers in charge of…
Q: Image attached below. Questions 1. Explain how the manager if each division will react to the…
A: Since you have posted under single multiple sub-parts, we solved your first 3 parts, for rest…
Q: Discuss how an emphasis on financial performance of cost centers, as measured by traditional cost…
A: Cost Accounting System: Cost accounting system can be defined as a framework designed by the…
Q: The use of market price in internal transfers, generally, provides managerial incentive and leads to…
A: Market price refers to the price that is prevailing in the market in normal conditions considering…
Q: How can conflicts arise between the decision model used by a manager and the performance evaluation…
A: Upper management experiences a continuing struggle: ensuring that lower-level managers' performance…
Q: Which of the following is not among the main uses of Activity-Based-Management ABM Select one: O a.…
A: Activity Based Management is a method or procedure of analysing profitability of the company by…
Q: Responsibility centers. Elmhurst Corporation is considering changes to its responsibility accounting…
A: Responsibility Center: The responsibility center is the specific centre in which each work is…
Q: Which of the following is not a qualitative decision that should be considered in an outsourcing…
A: Qualitative decisions are more subjective since they are based on elements other than numerical…
Q: Provide 2 examples of situation where the use of ROI can lead to decisions which may harm the future…
A: Return on investment: Return on investment (ROI) or return on costs is a ratio between net income…
Q: For each of the following, select its best description. A. Incurs costs without directly yielding…
A: Costs and revenues are two important elements in business. Performance of managers is also being…
Q: The manager of the manufacturing unit of a company is responsible for the costs of the manufacturing…
A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…
Q: How do organizations use pay for performance to motivate managers?
A:
Q: Elmhurst Corporation is considering changes to its responsibility accounting system. Which of the…
A: Responsibility Center: The responsibility center is the specific centre in which each work is…
Discuss whether the manager of Bell Division should be evaluated only on
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- Charlies Wood Works produces wood products (e.g., cabinets, tables, picture frames, and so on). Production departments include Cutting and Assembly. The Janitorial and Security departments support the Cutting and Assembly departments. The Assembly Department spans about 46,400 square feet and holds assets valued at about 60,000. The Cutting Department spans about 33,600 square feet and holds assets valued at about 140,000. Charlies Wood Works allocates support department costs using the direct method. If costs from the Janitorial Department are allocated based on square feet and costs from the Security Department are allocated based on asset value, determine (a) the percentage of Janitorial costs that should be allocated to the Assembly Department and (b) the percentage of Security costs that should be allocated to the Cutting Department.D Corporation is one of the major producers of prefabricated houses in the home buildingindustry. The corporation consists of two divisions:1. Bell Division, which acquires the raw materials to manufacture the basic house components and assembles them into kits.2. Cornish Division, which takes the kits and constructs the homes for final home buyers.The corporation is decentralized and the management of each division is measured by its income and return on investment. Bell Division assembles seven separate house kits using raw materials purchased at theprevailing market prices. The seven kits are sold to Cornish for prices ranging from US$45,000 to US$98,000. The prices are set by the corporate management of D Corporation using prices paid by Cornish when it buys comparable units from outside sources. The smaller kits with the lower prices have become a larger portion of the units sold because the final house buyer is faced with prices that are increasing more rapidly than personal…Dee Corporation is one of the major producers of pre-fabricated houses in the home building industry. Thecorporation consists of two divisions:1. Bell Division, which acquires the raw materials to manufacture the basic house components andassembles them into kits.2. Cornish Division, which takes the kits and constructs the homes for final home buyers.The corporation is decentralized and the management of each division is measured by its income and return oninvestment.Bell Division assembles seven separate house kits using raw materials purchased at the prevailing market prices.The seven kits are sold to Cornish for prices ranging from US$45,000 to US$98,000. The prices are set bycorporate management of Dee Corporation using prices paid by Cornish when it buys comparable units fromoutside sources. The smaller kits with the lower prices have become a larger portion of the units sold becausethe final house buyer is face with prices that are increasing more rapidly than personal income.…
- Code Incorporated has three divisions (Entertainment, Plastics, and Video Card), each of which is considered an investment center for performance evaluation purposes. The Entertainment Division manufactures video arcade equipment using products produced by the other two divisions, as follows: 1. The Entertainment Division purchases plastic components from the Plastics Division that are considered unique (i.e., they are made exclusively for the Entertainment Division). In addition, the Plastics Division makes less-complex plastic components that it sells externally, to other producers. 2. The Entertainment Division purchases, for each unit it produces, a video card from Code's Video Card Division, which also sells this video card externally (to other producers). The per-unit manufacturing costs associated with each of the above two items, as incurred by the Plastic Components Division and the Video Card Division, respectively, are: Plastic Components Video Cards Direct…Ludmilla Construction Company is composed of two divisions: (1) Home Construction and (2) Commercial Construction. The Home Construction Division is in the process of building 12 houses and the Commercial Construction Division is working on three projects.Required Identify each cost as being a direct or indirect cost, assuming the cost objects are the individual products (houses or projects). Identify each cost as being a direct or indirect cost, assuming the cost objects are the two divisions. Identify each cost as being a direct or indirect cost, assuming the cost object is Ludmilla Construction Company as a whole.Sembotix Company has several divisions including a Semiconductor Division that sells semiconductors to both internal and external customers. The company’s X-ray Division uses semiconductors as a component in its final product and is evaluating whether to purchase them from the Semiconductor Division or from an external supplier. The market price for semiconductors is $100 per 100 semiconductors. Dave Bryant is the controller of the X-ray Division, and Howard Hillman is the controller of the Semiconductor Division. The following conversation took place between Dave and Howard: Dave: I hear you are having problems selling semiconductors out of your division. Maybe I can help. Howard: You’ve got that right. We’re producing and selling at about 90% of our capacity to outsiders. Last year, we were selling 100% of capacity. Would it be possible for your division to pick up some of our excess capacity? After all, we are part of the same company. Dave: What kind of price could you give…
- Sembotix Company has several divisions including a Semiconductor Division that sells semiconductors to both internal and external customers. The company's X-ray Division uses semiconductors as a component in its final product and is evaluating whether to purchase them from the Semiconductor Division or from an external supplier. The market price for semiconductors is $100 per 100 semiconductors. Dave Bryant is the controller of the X-ray Division, and Howard Hillman is the controller of the Semiconductor Division. The following conversation took place between Dave and Howard: Dave: I hear you are having problems selling semiconductors out of your division. Maybe I can help. Howard: You've got that right. We're producing and selling at about 90% of our capacity to outsiders. Last year we were selling 100% of capacity. Would it be possible for your division to pick up some of the excess capacity? After all, we are part of the same company. Dave: What kind of price can you give me?…The Kelly-Elias Corporation, manufacturer of tractors and other heavy farm equipment, is organized along decentralized product lines, with each manufacturing division operating as a separate profit center. Each division manager has been delegated full authority on all decisions involving the sale of that division’s output both to outsiders and to other divisions of Kelly-Elias. Division C has in the past always purchased its requirement of a particular tractor-engine component from division A. However, when informed that division A is increasing its selling price to $135, division C’s manager decides to purchase the engine component from external suppliers. Division C can purchase the component for $115 per unit in the open market. Division A insists that, because of the recent installation of some highly specialized equipment and the resulting high depreciation charges, it will not be able to earn an adequate return on its investment unless it raises its price. Division A’s manager…The Kelly-Elias Corporation, manufacturer of tractors and other heavy farm equipment, is organized along decentralized product lines, with each manufacturing division operating as a separate profit center. Each division manager has been delegated full authority on all decisions involving the sale of that division’s output both to outsiders and to other divisions of Kelly-Elias. Division C has in the past always purchased its requirement of a particular tractor-engine component from division A. However, when informed that division A is increasing its selling price to $135, division C’s manager decides to purchase the engine component from external suppliers. Division C can purchase the component for $115 per unit in the open market. Division A insists that, because of the recent installation of some highly specialized equipment and the resulting high depreciation charges, it will not be able to earn an adequate return on its investment unless it raises its price. Division A’s manager…
- The Kelly-Elias Corporation, manufacturer of tractors and other heavy farm equipment, is organized along decentralized product lines, with each manufacturing division operating as a separate profit center. Each division manager has been delegated full authority on all decisions involving the sale of that division’s output both to outsiders and to other divisions of Kelly-Elias. Division C has in the past always purchased its requirement of a particular tractor-engine component from division A. However, when informed that division A is increasing its selling price to $135, division C’s manager decides to purchase the engine component from external suppliers. Division C can purchase the component for $115 per unit in the open market. Division A insists that, because of the recent installation of some highly specialized equipment and the resulting high depreciation charges, it will not be able to earn an adequate return on its investment unless it raises its price. Division A’s manager…Phoenix Inc., a cellular communication company, has multiple business units, organized as divisions. Each division’s management is compensated based on the division’s operating income. Division A currently purchases cellular equipment from outside markets and uses it to produce communication systems. Division B produces similar cellular equipment that it sells to outside customers—but not to division A at this time. Division A’s manager approaches division B’s manager with a proposal to buy the equipment from division B. If it produces the cellular equipment that division A desires, division B will incur variable manufacturing costs of $60 per unit. Relevant Information about Division B Sells 90,000 units of equipment to outside customers at $130 per unit Operating capacity is currently 80%; the division can operate at 100% Variable manufacturing costs are $70 per unit Variable marketing costs are $8 per unit Fixed manufacturing costs are $900,000 Income per Unit for Division A…Lansing Electronics Inc. manufactures a variety of printers, scanners, and fax machines in itstwo divisions: the PSF Division and the Components Division. The Components Division produces electronic components that can be used by the PSF Division. All the components thisdivision produces can be sold to outside customers. However, from the beginning, nearly allof its output has been used internally. The current policy requires that all internal transfers ofcomponents be transferred at full cost.Recently, Cam DeVonn, the chief executive officer of Lansing Electronics, decided to investigate the transfer pricing policy. He was concerned that the current method of pricing internaltransfers might force decisions by divisional managers that would be suboptimal for the firm. Aspart of his inquiry, he gathered some information concerning Component Y34, which is usedby the PSF Division in its production of a basic scanner, Model SC67.The PSF Division sells 40,000 units of Model SC67 each year…