FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 22: Responsibility Accounting and Transfer Pricing

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 31

Multiple Choice

Review LaterAdd Note

Review Later

Responsibility accounting systems measures the performance of:

A) The entire company.
B) Each center individually.
C) Both the entire company and each center individually.
D) Neither the entire company nor each center individually.

Correct Answer

verified

Show Answer

Question 32

Short Answer

Review LaterAdd Note

Review Later

Responsibility margin: $_____________

Correct Answer

verified

Show Answer

Question 33

True/False

Review LaterAdd Note

When an external market exists for a transferred product or service, most companies use either negotiated transfer prices or cost-plus transfer prices.

The contribution margin ratio of the local branch is:

The contribution margin approach to preparing reports for managers classifies costs into fixed and variable costs.

The most common value used for transfer pricing is:

All of the following costs are traceable to a specific factory except:

Contribution margin: $_____________

After the closing of Profit Center 3, the monthly income from operations for Profit Center 1, as measured by Dalton Co. should be approximately:

Return on assets: _____________%

Responsibility accounting systems should begin with:

Which of the following is a common fixed cost to the sales departments in a department store?

Responsibility income statement Classico's Pizza, a chain of pizza parlors, views each branch location as an investment center. The local branch reported the following results for the current year: Compute the following measures for this investment center: (a) Contribution margin: $________________ (b) Contribution margin ratio: ________________% (c) Responsibility margin: $________________ (d) Increase in annual responsibility margin that would be expected to result from a 10% increase in sales volume: $________________

Closing Profit Center 3 should cause Dalton's monthly operating income to:

The transfer price is the dollar amount used in recording sales to primary customers.

In a responsibility accounting system, the recording of revenue and costs begins with the:

The company's CEO must decide which of the three factories to expand in order to increase productive capacity. She should be most interested in the:

One purpose of a responsibility accounting system is to evaluate the performance of center managers.

In preparing an income statement that measures contribution margin and responsibility margin for a responsibility center, two concepts are applied in classifying costs. One is whether the costs are variable or fixed. The other is whether the costs are:

Many companies view performance margin as a more useful tool than responsibility margin for evaluating segment managers. This is because: