Managerial Accounting Final Exam Questions and 100% correct answers
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Course
Managerial Accounting
Institution
Managerial Accounting
Balanced Scorecard - correct answer an integrated set of performance measures that are derived from and support the organization's strategy
Common fixed cost - correct answer a fixed cost that supports more than one business segment, but is not traceable in whole or in part to any one of the bus...
Managerial Accounting Final Exam
Balanced Scorecard - correct answer an integrated set of performance measures that are derived from
and support the organization's strategy
Common fixed cost - correct answer a fixed cost that supports more than one business segment, but is
not traceable in whole or in part to any one of the business segments
Cost center - correct answer a business segment whose manager has control over costs but has no
control over revenue or investments in operating assets
Decentralized organization - correct answer an organization in which decision-making authority is not
confined to a few top executives but rather is spread throughout the organization
Economic Value Added (EVA) - correct answer a concept similar to residual income in which a variety of
adjustments may be made to GAAP financial statements for performance evaluation purposes
Investment Center - correct answer a business segment whose manager has control over cost, revenue,
and investments in operating assets
Margin - correct answer net operating income divided by sales
Net Operating Income - correct answer Income before interest and income taxes have been deducted
Operating Assets - correct answer cash, accounts receivable, inventory, plant and equipment, and all
other assets held for operating purposes
Profit Center - correct answer A business segment whose manager has control over cost and revenue but
has no control over investments in operating assets
Residual income - correct answer the net operating income that an investment center earns above the
minimum required return on its operating assets
, Managerial Accounting Final Exam
Responsibility center - correct answer any business segment whose manager has control over costs,
revenues, or investments in operating assets
Return on Investment (ROI) - correct answer Net operating income divided by average operating assets.
It also equals margin multiplied by turnover
Segment - correct answer any part or activity of an organization about which managers seek cost,
revenue, or profit data
Segment margin - correct answer a segment's contribution margin less its traceable fixed costs. It
represents the margin available after a segment has covered all of its own traceable costs
Traceable fixed cost - correct answer a fixed cost that is incurred because of the existence of a particular
business segment and that would be eliminated if the segment were eliminated
Turnover - correct answer sales divided by average operating assets
Market price - correct answer the price charged for an item on the open market
Negotiated transfer price - correct answer a transfer price agreed on between buying and selling
divisions
Range of acceptable transfer prices - correct answer The range of transfer prices within which the profits
of both the selling division and the buying division would increase as a result of a transfer
Suboptimization - correct answer An overall level of profits that is less than a segment or a company is
capable of earning
Transfer price - correct answer the price charged when one division or segment provides goods or
services to another division or segment of an organization
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