Week 6, Quiz # 2

Week 6 : Segment Reporting and Relevant Costs for Decisions - Quiz

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Question 1.1. (TCO D) A company that has a profit can increase its return on investment by (Points : 5) |

       increasing sales revenue and operating expenses by the same dollar amount.

       increasing average operating assets and operating expenses by the same dollar amount.

       increasing sales revenue and operating expenses by the same percentage.

       decreasing average operating assets and sales by the same percentage.

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Question 2.2. (TCO D) Delmar Corporation is considering the use of residual income as a measure of the performance of its divisions. Which major disadvantage of this method should the company consider before deciding to institute it? (Points : 5) |

       This method does not take into account differences in the size of divisions.

       Investments may be adopted that will decrease the overall return on investment.

       The minimum required rate of return may eliminate desirable investments.

       Residual income does not measure how effectively the division manager controls costs.

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Question 3.3. (TCO D) Last year, the House of Orange had sales of $826,650, net operating income of $81,000, and operating assets of $84,000 at the beginning of the year and $90,000 at the end of the year. What was the company's turnover, rounded to the nearest tenth? (Points : 5) |

       9.5

       10.2

       9.8

       9.2

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Week 6 : Segment Reporting and Relevant Costs for Decisions - Quiz

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Question 1.1.(TCO D) Data for December concerning Dinnocenzo Corporation's two major business segments-Fibers and Feedstocks-appear below: Sales revenues, Fibers |...