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The Axle Division of LaBate Company makes and sells only one product. Annual data on the Axle Division's single product follow: The Axle Division of LaBate Company makes and sells only one product. Annual data on the Axle Division's single product follow: -Suppose the manager of Axle desires a return on investment of 22%.In order to achieve this goal,Axle must sell how many units per year? A) 14,500 units. B) 16,750 units. C) 18,250 units. D) 19,500 units. -Suppose the manager of Axle desires a return on investment of 22%.In order to achieve this goal,Axle must sell how many units per year?


A) 14,500 units.
B) 16,750 units.
C) 18,250 units.
D) 19,500 units.

E) C) and D)
F) None of the above

Correct Answer

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The Axle Division of LaBate Company makes and sells only one product. Annual data on the Axle Division's single product follow: The Axle Division of LaBate Company makes and sells only one product. Annual data on the Axle Division's single product follow: -If Axle sells 15,000 units per year,what would be the residual income? A) $10,000. B) $30,000. C) $50,000. D) $100,000. -If Axle sells 15,000 units per year,what would be the residual income?


A) $10,000.
B) $30,000.
C) $50,000.
D) $100,000.

E) All of the above
F) A) and B)

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The Millard Division's operating data for the past two years are provided below: The Millard Division's operating data for the past two years are provided below: Millard Division's margin in Year 2 was 150% of the margin in Year 1. -What was the turnover for Year 1? A) 1.2. B) 1.5. C) 3.0. D) 4.0. Millard Division's margin in Year 2 was 150% of the margin in Year 1. -What was the turnover for Year 1?


A) 1.2.
B) 1.5.
C) 3.0.
D) 4.0.

E) B) and D)
F) A) and B)

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The Baily Division recorded operating data as follows for the past two years: The Baily Division recorded operating data as follows for the past two years: Baily Division's turnover was exactly the same in both Year 1 and Year 2. -What were the average operating assets in Year 2? A) $720,000. B) $750,000. C) $800,000. D) $900,000. Baily Division's turnover was exactly the same in both Year 1 and Year 2. -What were the average operating assets in Year 2?


A) $720,000.
B) $750,000.
C) $800,000.
D) $900,000.

E) A) and C)
F) All of the above

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The Northern Division of the Gordon Company reported the following data for last year: The Northern Division of the Gordon Company reported the following data for last year: -What was the residual income for the Northern Division last year? A) $48,000. B) $90,000. C) $125,000. D) $135,000. -What was the residual income for the Northern Division last year?


A) $48,000.
B) $90,000.
C) $125,000.
D) $135,000.

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

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Division B had an ROI last year of 15%.The division's minimum required rate of return is 10%.If the division's average operating assets last year were $450,000,what was the division's residual income for last year?


A) $22,500.
B) $37,500.
C) $45,000.
D) $67,500.

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

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Division X of Charter Corporation makes and sells a single product that is used by manufacturers of forklift trucks.Presently,it sells 12,000 units per year to outside customers at $24 per unit.The annual capacity is 20,000 units,and the variable cost to make each unit is $16.Division Y of Charter Corporation would like to buy 10,000 units a year from Division X to use in its products.There would be no cost savings from transferring the units within the company rather than selling them on the outside market.What should be the lowest acceptable transfer price from the perspective of Division X?


A) $16.00.
B) $17.60.
C) $21.40.
D) $24.00.

E) B) and D)
F) None of the above

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Faast Company's quality cost report is to be based on the following data: Faast Company's quality cost report is to be based on the following data: -What will be the total prevention cost appearing on the quality cost report? A) $69,000. B) $139,000. C) $148,000. D) $178,000. -What will be the total prevention cost appearing on the quality cost report?


A) $69,000.
B) $139,000.
C) $148,000.
D) $178,000.

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

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(Appendix 11A) Kyekyeku Company retails two models of a product: Model X and Model Y. It considers both products to be close substitutes. The following data relate to the company's operations for last year: (Appendix 11A) Kyekyeku Company retails two models of a product: Model X and Model Y. It considers both products to be close substitutes. The following data relate to the company's operations for last year: -(Appendix 11A) What were the sales volume variances for Model X and Model Y,respectively,for last year? A) $200 favourable and $3,496 favourable. B) $240 favourable and $3,680 favourable. C) $1,250 favourable and $1,900 favourable. D) $1,500 favourable and $2,000 favourable. -(Appendix 11A) What were the sales volume variances for Model X and Model Y,respectively,for last year?


A) $200 favourable and $3,496 favourable.
B) $240 favourable and $3,680 favourable.
C) $1,250 favourable and $1,900 favourable.
D) $1,500 favourable and $2,000 favourable.

E) All of the above
F) A) and D)

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All other things equal,which of the following events would generally cause an increase in a company's return on investment (ROI) ?


A) An increase in average operating assets.
B) A decrease in sales.
C) A decrease in operating expenses.
D) An increase in operating expenses.

E) A) and D)
F) A) and C)

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Ricric Corporation has provided the following data for one of its products: Ricric Corporation has provided the following data for one of its products: -What is the throughput time for this operation? A) 3 days. B) 7.7 days. C) 8 days. D) 17 days. -What is the throughput time for this operation?


A) 3 days.
B) 7.7 days.
C) 8 days.
D) 17 days.

E) None of the above
F) A) and B)

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Last year,a company had shareholders' equity of $160,000,operating income of $16,000,and sales of $100,000.The turnover was 0.5.What was the return on investment (ROI) ?


A) 7%.
B) 8%.
C) 9%.
D) 10%.

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

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Ieso Company has two stores: J and K. During November, Ieso Company reported operating income of $30,000 and sales of $450,000. The contribution margin in Store J was $100,000, or 40% of sales. The segment margin in Store K was $30,000, or 15% of sales. Traceable fixed expenses were $60,000 in Store J, and $40,000 in Store K. -What were the total sales in Store J?


A) $100,000.
B) $150,000.
C) $250,000.
D) $400,000.

E) All of the above
F) B) and C)

Correct Answer

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Faust Company's quality cost report is to be based on the following data: Faust Company's quality cost report is to be based on the following data: -What will be the total internal failure cost appearing on the quality cost report? A) $71,000. B) $74,000. C) $132,000. D) $163,000. -What will be the total internal failure cost appearing on the quality cost report?


A) $71,000.
B) $74,000.
C) $132,000.
D) $163,000.

E) None of the above
F) A) and C)

Correct Answer

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Eacker Company's quality cost report is to be based on the following data: Eacker Company's quality cost report is to be based on the following data: -What will be the total internal failure cost appearing on the quality cost report? A) $134,000. B) $143,000. C) $150,000. D) $158,000. -What will be the total internal failure cost appearing on the quality cost report?


A) $134,000.
B) $143,000.
C) $150,000.
D) $158,000.

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

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Which of the following is the numerator in the calculation of the turnover component of ROI?


A) Invested capital.
B) Total assets.
C) Operating income.
D) Sales.

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

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Fixed costs that are traceable to a segment may become common if the segment is divided into smaller units.

A) True
B) False

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The Axle Division of LaBate Company makes and sells only one product. Annual data on the Axle Division's single product follow: The Axle Division of LaBate Company makes and sells only one product. Annual data on the Axle Division's single product follow: -Suppose the manager of Axle desires an annual residual income of $45,000.In order to achieve this,Axle should sell how many units per year? A) 14,500 units. B) 16,750 units. C) 18,250 units. D) 19,500 units. -Suppose the manager of Axle desires an annual residual income of $45,000.In order to achieve this,Axle should sell how many units per year?


A) 14,500 units.
B) 16,750 units.
C) 18,250 units.
D) 19,500 units.

E) C) and D)
F) A) and D)

Correct Answer

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(Appendix 11A) Which of the following is(are) NOT used in calculating sales mix variances for two products that are close substitutes?


A) The budgeted sales mix percentages.
B) The actual sales mix percentages.
C) The actual total units of the two products sold.
D) The market volume in units.

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

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The performance of the manager of Division A is evaluated by residual income.Which of the following would improve the manager's performance?


A) Increase in average operating assets.
B) Decrease in average operating assets.
C) Increase in minimum required return.
D) Decrease in operating income.

E) All of the above
F) A) and D)

Correct Answer

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