Cost-volume-profit analysis is used PRIMARILY by management:for control purposes.O to attain extremely accurate financial results.Oto establish a target net income for next year.as a planning tool.

Cost-volume-profit analysis is used PRIMARILY by management:as a planning tool.This is the most…

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Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter12: Balanced Scorecard And Other Performance Measures

Section: Chapter Questions

Problem 9EA: Classify each of the following performance measures into the balanced scorecard perspective to which...

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Management uses Cost Volume Profit (CPV) analysis as a planning process to predict the future volume of activity, costs incurred, sales made and profit received. Required: i. List and explain FIVE assumptions in C-V-P analysis.
____ 1.Which of the following is a responsibility center that incurs expenses, generates revenues, and is responsible for generating a return on assets? a. Cost center b. Revenue center c. Profit center d. Investment center ____ 2.Which one of the following is the most useful measure for evaluating a manager's performance in controlling revenues and costs in a profit center? a. Contribution margin b. Contribution net income c. Contribution gross profit d. Controllable margin ____ 3.Hanover Corporation desires to earn target net income of $42,000. The selling price per unit is $18, unit variable cost is $5.60, and total fixed costs are $123,912. How many units must the company sell to earn its target net income? a. 13,380 b. 9,993 c. 3,387 d. 9,217 ____ 4.Remark…
In evaluating the profit center manager, the operating income should be compared a.across profit centers b.to the competitor's net income c.to the total company earnings per share d.to a budget
Cost-volume-profit (CVP) analysis for revenue planning determines: The desired profit level of a firm. Both revenue maximization and cost minimization. The costs associated with a certain level of revenue. The max amount of revenue a firm can receive. The revenue required to achieve a desired profit level.
Based on the profit maximization goal, the financial manager would choose Asset D. Asset B. Asset A. Asset C.
A responsibility center structure that considers investments made by the operating segments by using a common cost of capital percentage is called_______. A. return on investment B. residual income C. a profit center D. a discretionary cost center
Classify each of the following performance measures into the balanced scorecard perspective to which it relates: financial perspective, internal operations perspective, learning and growth perspective, or customer perspective. A. Number of improved products B. Time from packaging to delivery or display C. Production costs D. Number of customer suggestions E. Sales mix revenues F. Number of repeat customers
A Box Scorecard was prepared for a value stream: Required: 1. How many nonfinancial measures are used to evaluate performance? Why are nonfinancial measures used? 2. Classify the operational measures as time-based, quality-based, or efficiency-based. Discuss the significance of each category for lean manufacturing. 3. What is the role of the Planned Future State column? 4. Discuss the capacity category and explain the meaning of each measure and its significance. 5. Discuss the relationship between the financial measures and the measures in the operational and capacity categories.
The high-low method and least-squares regression are used by managers to _____________________. A. decide whether to make or buy a component part B. minimize corporate tax liability C. maximize output D. estimate costs
The residual income approach to measuring divisional performance measurement is closely related to the ____________ method of performance measurement. Select one: a. Internal rate of return b. Payback period c. Return on capital employed d. Accounting rate of return e. Economic value added
Select all of the formulas below that will correctly get you the Return on Investment. Operating Income / Total Assets Sales Margin * Capital Turnover (Operating Income / Sales Revenue) (Sales Revenue / Total Assets) Operating Income - (Target Rate of Return * Total Assets) -DO Which of the following promotes goal congruence (aligned goals between segment managers and top management)? Return on Investment as a performance evaluation measure Residual Income as a performance evaluation measure
Performance measurement considered as financial rather than non-financial measures includes all of the following, except: Profit margin Return on investment Customer satisfaction Economic value-added

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Cost-volume-profit analysis is used PRIMARILY by management: for control purposes. O to attain extremely accurate financial results. Oto establish a target net income for next year. as a planning tool.