Return
on investment (ROI) is defined as ________ .
ANSWER
correct
·
YOU WERE SURE AND CORRECT
Operating
income / Total assets
·
Operating
income × Total assets
·
Operating
income + Total assets
·
Operating
income - Total assets
·
I DON'T KNOW YET
Common
fixed expenses ________.
ANSWER
correct
·
are
the differences between actual and budgeted for specific revenues or expenses
·
is
the operating income generated by a profit or investment center before
subtracting common fixed costs that have been allocated to the center
·
YOU WERE SURE AND CORRECT
include
expenses that cannot be traced to the profit center
·
include
those fixed expenses that can be traced to a profit center
·
I DON'T KNOW YET
Which
of the following is NOT true about a flexible budget?
ANSWER
correct
·
A manager would use a flexible
budget for performance evaluation at the end of a period.
·
A manager compares actual
results against a flexible budget.
·
A manager uses a flexible
budget to plan for uncertainties instead of a variance budget.
·
YOU WERE SURE AND CORRECT
A flexible budget is prepared
for the same level of volume than the one originally planned.
·
I DON'T KNOW YET
Which
of the following is TRUE about a responsibility center?
ANSWER
INCORRECT
·
Higher-level managers who
report to lower-level managers have fewer responsibilities.
·
Managers do NOT plan and
control activities.
·
YOU WERE SURE AND INCORRECT
Higher-level managers budget
and control costs of a single value-chain function only.
·
THE CORRECT ANSWER
Lower-level managers report to
higher-level managers who have broader responsibilities.
·
I DON'T KNOW YET
Lower-level managers who report to higher-level managers have
broader responsibilities is a TRUE statement
about a responsibility center. In a responsibility center, lower-level managers
budget and control costs of a single value-chain function, lower-level managers
report to higher-level managers who have broader responsibilities, and the
manager may also forecast and direct activities.
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