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Finance and Accounting: Value-Added Costs, Investment Ratios and Performance Evaluation

Please answer the following multiple choice problems:

1). Value-added costs are standard costs based on
A) Practical standards.
B) Ideal usage standards.
C) Cycle time.
D) The value added.

2) Which of the following must occur before one can calculate the return on investment ratios for the subunits of an organization?
A) All investment costs must be collected and divided according to the number of subunits in the organization.
B) The total revenues must be allocated according to the number of subunits that will be calculating a return on investment.
C) The total costs of the organization must be allocated evenly to all subunits of the organization.
D) The corporate assets must be allocated appropriately to each responsibility subunit of the organization.

3) Which of the following is a true statement regarding performance evaluation?
A) Managers should be evaluated on those things over which they have influence.
B) Managers should be evaluated on the performance of the entire organization.
C) Sales personnel do not have complete control over the level of sales.
D) Managers should not be evaluated on those things over which they have influence, if they do not have complete control over them

Solution Preview

Here are the 3 multiple choice questions.

1). Value-added costs are standard costs based on
Answer (D): Value added costs are costs based on the value that is added for the customer. For e.g. a customer might use a basic mobile phone, but value added services like astrology, cricket scores, online ticket booking etc. entail a standard value added cost. This cost ...

Solution Summary

This solution provides a brief, but concise response to the above finance and accounting based multiple choice problems. Each response is accompanied with an explanation which highlights why the selected response is the most accurate.

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