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Exam 10: Performance Measurement in Decentralized Organizations

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Question 71

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Tanouye Corporation keeps careful track of the time required to fill orders.Data concerning a particular order appear below: The throughput time was:

A) 4.1 hours
B) 12.9 hours
C) 25.6 hours
D) 21.5 hours

E) A) and B)
F) A) and C)

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Question 72

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Which of the following segment performance measures will decrease if there is an increase in the interest expense for that segment?

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Question 73

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Schurz Corporation's management reports that its average delivery cycle time is 26.7 days, its average throughput time is 10.0 days, its manufacturing cycle efficiency (MCE)is 0.22, its average move time is 0.6 day, and its average queue time is 6.7 days. Required: a.What is the wait time? b.What is the process time? c.What is the inspection time?

The division's turnover is closest to:

Eady Wares is a division of a major corporation.The following data are for the latest year of operations: Required: a.What is the division's margin? b.What is the division's turnover? c.What is the division's return on investment (ROI)? d.What is the division's residual income?

Haney Fabrication is a division of a major corporation.Last year the division had total sales of $21,560,000, net operating income of $1,897,280, and average operating assets of $7,000,000.The company's minimum required rate of return is 16%. Required: What is the division's return on investment (ROI)?

Last year's margin was closest to:

The turnover for this year's investment opportunity considered alone is closest to:

The following data pertains to Timmins Company's operations last year: Required: a.Compute the company's average operating assets. b.Compute the company's residual income for the year.

The division's residual income is closest to:

The ROI for the investment opportunity is closest to:

Last year's return on investment (ROI) was closest to:

Residual income should be used to evaluate an investment center rather than a cost or profit center.

The throughput time was:

Inspection Time is generally considered to be value-added time.

If the company pursues the investment opportunity, this year's combined residual income for the entire company will be closest to:

The basic objective of responsibility accounting is to charge each manager with those costs and/or revenues over which he has control.

In November, the Universal Solutions Division of Keaffaber Corporation had average operating assets of $480,000 and net operating income of $46,200.The company uses residual income, with a minimum required rate of return of 11%, to evaluate the performance of its divisions.What was the Universal Solutions Division's residual income in November?

The division's turnover used to compute ROI is closest to:

Salvey Inc.reported the following results from last year's operations: The company's average operating assets were $3,000,000. At the beginning of this year, the company has a $300,000 investment opportunity that involves sales of $480,000, fixed expenses of $100,800, and a contribution margin ratio of 30% of sales. If the company pursues the investment opportunity and otherwise performs the same as last year, the combined ROI for the entire company will be closest to: