Louisiana State UniversityACCT 2101 ch10 ch10
Student: ___________________________________________________________________________
1.In a decentralized organization, lower-level managers are given a great deal of auto
...
Louisiana State UniversityACCT 2101 ch10 ch10
Student: ___________________________________________________________________________
1.In a decentralized organization, lower-level managers are given a great deal of autonomy in decision-making. True False
2.One disadvantage of decentralization is that it fosters competition among divisions. True False
3.The controllability principle holds that managers should not be held responsible only for what they can control but are also responsible for allocated costs.
True False
4.The part of the organization for which managers are responsible is called a related-party center. True False
5.A legal services department would be an example of a cost center. True False
6.A revenue center manager is responsible for more functions than is a profit center manager. True False
7.A profit center manager often also supervises revenue and cost center managers. True False
8.The most common method of evaluating a profit center manager is the segmented income statement. True False
9.Investment center managers have control over the investment of assets. True False
10.Segment margin and profit margin are identical terms. True False
11.The balanced scorecard attempts to focus managers' attention on more than just financial measures. True False
12.Return on investment is calculated as the return on the segment's assets divided by the value of those assets. True False
13.The DuPont method breaks residual income into profit margin and investment turnover. True False
14.Investment turnover is defined as the ratio of sales revenue to average invested assets. True False
15.Profit margin is defined as the ratio of sales revenue to operating income. True False
16.Residual income is the difference between operating profit and the minimum profit the organization must earn to cover the ROI. True False
17.The hurdle rate is also called economic value added. True False
[Show More]