Advanced Managerial Accounting Quiz 2

The balanced scorecard approach includes four perspectives. Which of the following is not one of those perspectives?

• a) Financial perspective
  
  
  

• b) Internal process perspective

• c) Customer perspective

• d) Employee perspective

The balanced scorecard helps organizations:

• a) Measure only financial performance
  
  
  

• b) Focus solely on short-term goals

• c) Balance financial and non-financial performance measures

• d) Eliminate the need for performance evaluation

Which of the following is an example of a Learning and Growth performance indicator?

• a) Employee training hours
  
  
  

• b) Return on investment (ROI)

• c) Customer satisfaction index

• d) Number of new product launches

Return on investment (ROI) is calculated as:

• a) Operating income divided by total sales

• b) Net income divided by average operation assets

• c) Net income divided by shareholders' equity

• d) Gross profit divided by total assets

Westerville Company reported the following results from last year’s operations:

Sales $ 1,000,000

Variable expenses 300,000

Contribution margin 700,000

Fixed expenses 500,000

Net operating income $ 200,000

Average operating assets $ 625,000

At the beginning of this year, the company has a $120,000 investment opportunity with the

following cost and revenue characteristics:

Sales $200,000

Contribution margin ratio 60% of sales

Fixed expenses $90,000

The company’s minimum required rate of return is 15%.

Required:

1. What is last year’s margin?

2. What is last year’s turnover?

3. What is last year’s return on investment (ROI)?

4. What is the margin related to this year’s investment opportunity?

5. What is the turnover related to this year’s investment opportunity?

6. What is the ROI related to this year’s investment opportunity?

Responsibility accounting is a system that:

• a) Focuses on financial reporting for external stakeholders
  
  
  

• b) Assigns accountability for performance to specific individuals or departments

• c) Measures the cost of producing goods and services

• d) Calculates the return on investment (ROI) for a company

The primary purpose of a responsibility center is to:

• a) Allocate costs to various departments
  
  
  

• b) Track revenue generated by different divisions

• c) Evaluate the performance of managers or departments

• d) Determine the optimal production quantity

Which of the following is an example of a cost center?

• a) Sales department
  
  
  

• b) Research and development department

• c) Production department

• d) Marketing department

1. In a profit center, managers are responsible for:
   
   
   
   

• 1. a) Controlling costs only

• 1. b) Generating revenue only

• 1. c) Controlling costs and generating revenue

• 1. d) None of the above

1. Measures of Internal Business Process Performance

   Management of Mittel Company would like to reduce the amount of time between when a

   customer places an order and when the order is shipped. For the first quarter of operations during

   the current year the following data were reported:

   Inspection time 0.3 days

   Wait time (from order to start of production) 14.0 days

   Process time 2.7 days

   Move time 1.0 days

   Queue time . 5.0 days

   Required:

   1. Compute the throughput time.

   2. Compute the manufacturing cycle efficiency (MCE) for the quarter.

   3. What percentage of the throughput time was spent in non–value-added activities?

   4. Compute the delivery cycle time.