Cost Accounting

Ace your homework & exams now with Quizwiz!

The manager acting independently in such a way as to simultaneously achieve top management's objectives is exhibiting:

Goal congruence.

What does an employment contract accomplish?

It is a common mechanism for achieving the objectives of top management.

The evaluation by upper-level managers of the performance of mid-level managers is:

Management control.

The common factor among control systems in hiring practices, promotion policies, and strategic performance measurement is:

Management sets expectations for desired employee performance.

Performance evaluation in most firms is applied at:

Many different levels from top management down to individual production and sales employees.

The process by which managers at all levels in the firm gain information about the performance of tasks within the firm and judge that performance against pre-established criteria is:

Performance measurement.

The contribution by profit center (CPC) expands the contribution margin income statement by distinguishing:

Controllable, noncontrollable, and untraceable fixed costs.

In a not-for-profit organization, you are more likely to see

Cost centers.

Among the benefits of centralized management in a firm is(are):

Utilization of expertise of top management.

Chilton Day School allocates marketing and administrative costs to its three schools on the basis of each school's annual tuition revenue (as a percentage of the total). Last year the allocations (000s omitted) were as follows: Tuition Revenue: Preschool: $1,500 Middle school: $1,800 High School: $2,200 Total: $5,500 Marketing and administration: Preschool: $275 Middle school: $325 High School: $400 Total: $1,000 In the current year, the middle and high schools experienced no change in revenues, but the preschool's tuition revenue increased to $1.9 million. Marketing and administrative costs rose to $1,250,000. Using revenue as an allocation base, how much current year cost will be allocated to the:

Preschool: $403 Middle School: $381 High School: $466 Total: $1,250

From a strategic standpoint, profit centers tend to:

Provide incentive for coordination among managers of different functional units.

The balanced scorecard measures the strategic business unit (SBU)'s performance in all of the following areas except:

Accounting and tax compliance.

The objectives of management control of the manager include:

Motivation, incentive and fairness.

The evaluation of operating level employees by mid-level managers is:

Operational control.

Quick Technology Company is a supplier of high-end research equipment for the pharmaceutical industry. Quick currently has a variety of different firms producing computer chips for increased memory and improved processing speeds which are installed in Quick's equipment. In this case, having another firm provide supplies for Quick's equipment is an example of:

Outsourcing.

"Outsourcing" a cost center is often done to:

Reduce cost and obtain improved focus.

The type of strategic business unit (SBU) where the focus is on the selling function of a specific product line or by a geographical location is referred to as a(n):

Revenue center.

Sand and Sea Resorts owns and operates two resorts in a coastal town. Both resorts are located on a barrier island that is connected to the mainland by a high bridge. One resort is located on the beach and is called the Crystal Coast Resort. The other resort is located on the inland waterway which passes between the town and the mainland; it is called the Harborview Resort. Some key information about the two resorts for the current year is shown below. HarborviewCrystal CoastTotalRevenue (000s)$ 3,500$ 6,500$ 10,000Square feet75,000225,000300,000Rooms60140200Assets (000s)$ 100,000$ 400,000$ 500,000 The nontraceable operating costs of the resort amount to $4,000,000. By careful study, the management accountant at Sand and Sea has determined that, while the costs are not directly traceable, the total of $4 million could be fairly allocated to the four cost drivers as follows. Cost DriverAmount AllocatedRevenue$ 200,000Square feet100,000Rooms600,000Assets (000s)3,100,000 What is the operating profit of the Crystal Coast Resort, using revenue as an allocation base?

$3,900,000.

Washington Arts allocates marketing and administrative costs to its three schools based on total annual tuition revenue for the schools: Longview Campus Tuition Revenue: $1,000,000 Springhill Campus Tuition revenue: $800,000 Centrer Saint Tuition revenue: $1,200,000 Total Tuition Revenue: $3,000,000 Marketing and administrative total: $1,200,000 Using revenue as an allocation base, the amount of costs allocated to the Longview Campus is calculated to be:

$400,000


Related study sets

Control of Microorganisms: Physical and Chemical Methods

View Set

Landing Gears Section B FAA (Brakes)

View Set

FI 302 | EXAM 3 | WHALEY, FI302 Whaley Exam 3_____

View Set

Paul Krugman Macroeconomics Ch 13

View Set

Unit 1.2: Understand the hardware requirements of a computer system

View Set