______1.

In a segmented contribution format income statement, what

is the best measure of the long-run profitability of a segment?
a. its gross margin
b. its contribution margin
c. its segment margin
d. its segment margin minus an allocated portion of common fixed
expenses

______2. In order to properly report segment margin as a guide to

long-run segment profitability and performance, fixed costs must be
separated into two broad categories. One category is common fixed
costs. What is the other category?
a. discretionary fixed costs
b. committed fixed costs
c. traceable fixed costs
d. specialized fixed costs

______3. Toxemia Salsa Company manufactures five flavors of salsa.

Last year, Toxemia generated net operating income of $40,000. The
following information was taken from last year's income
statement segmented by flavor (brackets indicate a negative
amount): Wimpy Mild Medium Hot Atomic Contribution margin
$(2,000) $45,000 $35,000 $50,000 $162, Segment margin $(16,000)
$(5,000) $7,000 $10,000 $94, Segment margin less allocated
common fixed expenses $(26,000) $(15,000) $(3,000) $0 $84,
Toxemia expects similar operating results for the upcoming year. If
Toxemia wants to maximize its profitability in the upcoming year,
which flavor or flavors should Toxemia discontinue?
a. no flavors should be discontinued
b. Wimpy
c. Wimpy and Mild
d. Wimpy, Mild, and Medium
 ______4. Uchimura Corporation has two divisions: the AFE Division
and the GBI Division. The corporation's net operating income
is $42,000. The AFE Division's divisional segment margin is
$15,700 and the GBI Division's divisional segment margin is
$175,400. What is the amount of the common fixed expense not
traceable to the individual divisions? a. $149, b. $57, c. $217, d. $191,

______5. Younie Corporation has two divisions: the South Division

and the West Division. The corporation's net operating income is
$26,900. The South Division's divisional segment margin is $42,800
and the West Division's divisional segment margin is
$29,900. What is the amount of the common fixed expense not
traceable to the individual divisions?
A) $56,800
B) $69,700
C) $72,700
D) $45,800

______6. Dukelow Corporation has two divisions: the Governmental

Products Division and the
Export Products Division. The Governmental Products Division's
divisional segment margin is
$255,000 and the Export Products Division's divisional segment
margin is $59,800. The total
amount of common fixed expenses not traceable to the individual
divisions is $163,700. What is
the company's net operating income?
a. $314,800
b. ($314,800)
c. $151,100
d. $478,500
______7. Miscavage Corporation has two divisions: the Beta Division
and the Alpha Division. The
Beta Division has sales of $580,000, variable expenses of $301,600,
and traceable fixed
expenses of $186,500. The Alpha Division has sales of $510,000,
variable expenses of
$178,500, and traceable fixed expenses of $222,100. The total
amount of common fixed
expenses not traceable to the individual divisions is $235,500. What
is the company's net
operating income?
a. $374,400
b. $201,300
c. $609,900
d. ($34,200)

______8. J Corporation has two divisions. Division A has a

contribution margin of $79,300 and
Division B has a contribution margin of $126,200. If total traceable
fixed costs are $72,400 and
total common fixed costs are $34,900, what is J Corporation's net
operating income?
a. $168,000
b. $170,600
c. $133,100
d. $98,200

______9. 1Which of the following is more characteristic of a

decentralized than a centralized business structure?
a.The firm's environment is stable.
b.There is little confidence in lower-level management to make
decisions.
c.The firm grows very quickly
d.The firm is relatively small.
______11. What term identifies an accounting system in which the
operations of the business are broken down into reportable
segments, and the control function of a foreperson, sales manager,
or supervisor is emphasized?
a. responsibility accounting
b. operations-research accounting
c. control accounting
d. budgetary accounting

______12. Which of the following is NOT a disadvantage of

decentralized operation?
a. Competition among managers decreases profits
b. Duplication of operations
c. Price cutting by departments that are competing in the same
product market
d. Top management freed from everyday tasks to do strategic
planning

_____13. Which is the best example of a decentralized operation? a.

One owner who prepares plans and makes decisions for the entire
company.
b. Each unit is responsible for their own operations and decision
making.
c. In a major company, operating decisions are made by top
management.
d. None of the above. All are examples of a centralized management.
 ______14. The following are advantages of decentralization except:
a. Managers make better decisions when closer to the operation of
the company.
b. Expertise in all areas of the business is difficult, decentralization
makes it better to delegate certain responsibilities.
c. Each decentralized operation purchases their own assets and pays
for operating costs.
d. Decentralized managers can respond quickly to customer
satisfaction and quality service.

______15. The balanced scorecard measures financial and

nonfinancial performance of a business. The balanced scorecard
measures four areas. Identify one of the following that is not
included as a performance measurement.
a. Internal Process
b. Financial
c. Innovation and Learning
d. Employees

______16. The balanced scorecard measures

a. only financial information
b. only nonfinancial information
c. both financial and nonfinancial information
d. external and internal information

______17. Responsibility accounting systems strive to: A. place blame

on guilty individuals. B. provide information to managers. C. hold
managers accountable for both controllable and noncontrollable
costs. D. identify unfavorable variances.
______18. Controllable costs, as used in a responsibility accounting
system, consist of:
A. only fixed costs.
B. only direct materials and direct labor.
C. those costs that a manager can influence in the time period under
review.
D. those costs about which a manager has some knowledge.

______19. A segment contribution margin would reflect the impact of:

A. variable operating expenses.
B. fixed expenses controllable by the segment manager.
C. fixed expenses traceable to the segment but controllable by
others.
D. common fixed expenses.

______20. Sands Corporation operates two stores: J and K. The

following information relates to store J: Sales revenue $1,300,
Variable operating expenses 600, Fixed expenses: Traceable to J and
controllable by J 275, Traceable to J and controllable by others 80,
J's segment contribution margin is:
A. $345,000. B. $425,000. C. $620,000. D. $700,000.

____25. In a balanced scorecard, measurements should be directly

linked to
a . organizational strategy and values.
b . the cost management system.
c . current organizational profitability.
d . activity-based management concepts.
______26. A balanced scorecard
a . records the variances between budgeted and actual revenues
and expenses.
b . can be used at multiple organizational levels by redefining the
categories and measurements.
c . is most concerned with organizational financial solvency and
business processes.
d . all of the above.

______27. On a balanced scorecard, which of the following would be

most appropriate to measure financial performance?
a Market share
b Customer retention
c Percentage of sales from new products
d Investment in intellectual capital

______28. Tanouye Corporation keeps careful track of the time

required to fill orders. Data concerning a particular order appear
below: Hour s Wait time 12. Process time 1. Inspection time 0. Move
time 2. Queue time 8. The throughput time was:
A) 4 hours B) 12 hours C) 25 hours D) 21 hours

______29. Simkin Corporation keeps careful track of the time required

to fill orders. Data concerning a particular order appear below: Hour
s Wait time 20. Process time 1. Inspection time 0. Move time 2.
Queue time 4. The manufacturing cycle efficiency (MCE) was closest
to:
A) 0. B) 0. C) 0. D) 0.
 ______30. Santoyo Corporation keeps careful track of the time
required to fill orders. Data concerning a particular order appear
below: Hour s Wait time 28. Process time 1. Inspection time 0. Move
time 3. Queue time 5. The delivery cycle time was:
A) 8 hours B) 3 hours C) 37 hours D) 36 hours

______35. Manufacturing cycle efficiency (MCE) is computed as: a.

throughput time/delivery cycle time
b. process time/delivery cycle time
c. value-added time/throughput time
d. value-added time/delivery cycle time

______36. Throughput time consists of:

a. process time
b. inspection time and move time
c. process time, inspection time, and move time
d. process time, inspection time, move time, and queue time

______37. The basic purpose of responsibility accounting is

a. motivation b. variance analysis c. authority d. budgeting

______38. Santino Company’s vice president for finance has decided

to use delivery performance measures to evaluate performance. He
requested the production manager to submit data what will be used
for the evaluation. The product manager submitted the following,
which, accordingly is typical of the time involved to complete
orders: Waiting time from orders being placed to start of production
6 days Waiting time from start of production to completion 2 days
Process time 1 week Move time 4 days Inspection time 1 day The
company operates seven days a week. What is the delivery cycle
time?
a. 20 days b. 14 days c. 8 days d. 6 days
 ______39. Refer to the given in item #38, the total manufacturing
cycle (or throughput) time is a. 7 days b. 8 days c. 14 days d. 20 days

______40. Refer to the given in item #38, the value-added production

time is
a. 1 day
b. 7 days
c. 14 days
d. 20 days

______41. Refer to the given in item #38, what is the manufacturing

cycle efficiency?
a. 12%
b. 35%
c. 50%
d. 5%

______42. All other things being equal, if a division's traceable

fixed expenses increase:
a. the division's contribution margin ratio will decrease.
b. the division's segment margin ratio will remain the same.
c. the division's segment margin will decrease.
d. the overall company profit will remain the same

______43. Lyons Company consists of two divisions, A and B. Lyons

Company reported a contribution margin of $50,000 for Division A,
and had a contribution margin ratio of 30% in Division B, when
sales in Division B were $200,000. Net income for the company was
$25, and traceable fixed expenses were $40,000. Lyons
Company's common fixed expenses were:
a. $85,000. b. $70,000. c. $45,000. d. $40,000.
______44. Leis Retail Company has two Stores, M and N. Store N had
sales of$180,000 during March, a segment margin of 30%, and
traceable fixed expenses of $26,000. The company as a whole had a
contribution margin ratio of 25% and $120,000 in total contribution
margin. Based on this information, total variable expenses in Store
M for the month must have been:
a. $140,000. b. $260,000. c. $300,000. d. $360,

______45. Net operating income is defined as:

a. sales minus variable expenses.
b. sales minus variable expenses and traceable fixed expenses.
c. contribution margin minus traceable and common fixed expenses.
d. net income plus interest and taxes