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    Segment Margin Income Statement

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    The segment margin income statement excludes
    All allocated costs in the calculation of the segment margin.
    All fixed costs.
    All period costs.
    Manufacturing overhead.

    Question 12. 12. Sara's Cake Company has started to do really well. Sara wants to see how much of a return she has now made on the company last year. Using the following information, calculate the return on investment.

    Total Revenue last year: $250,000

    Assets Jan. 1st: $50,000

    Assets Dec. 31st: $80,000

    Liabilities Jan. 1st: $45,000

    Liabilities Dec. 31st: $15,000

    Total Expenses last year: $100,000

    188%

    231%
    385%

    500%

    Question 13. 13. Which one of the following is an example of transfer pricing?
    Ford buys plastic from Du Pont plastics to use in car production

    Google takes profits from YouTube and distributes it to is shareholders

    Ratheon signs a government contract to sell specific arms to the military

    Coca-cola Bottling sells bottles to the Coca-cola company

    Question 14. 14. Sara's Cake Company is determining which types of cakes sold well last year. When using these numbers to look at metrics, what would this performance measure be called?

    Financial measures

    Non-financial measures

    Lagging indicators
    Leading indicators

    Question 15. 15. Sara's Cake Company has been doing some analysis and has decided to buy a new convection oven that will cut down production times of cakes by 15 minutes and allow for better texture in the cakes. Which part of the balanced scorecard would this be?
    Internal business process perspective

    External business process perspective

    Customer perspective

    Financial perspective

    Question 16. 16. Which one of the following is a good example of benchmarking as a business process?
    Coca-cola buys a new no-calorie sweetener to add to its diet colas
    Home Depot studies Amazon.com's shipping policies to improve its own

    Cisco acquires a smaller company that invented a new router design

    Sirius and XM merge to consolidate all of their channel lineups into one offering

    Question 17. 17. Which of the following measures are directly related to the financial perspective of a balanced scorecard? Market share, cash flow, revenue growth
    Net income, cash flow, revenue growth

    Market share, product return rate, cash flow

    Net income, cash flow, product return rate

    Question 18. 18. Which of the following is not a main barrier to the effective use of non-financial performance measures by organizations?
    Skepticism that the measures are directly related to the bottom line

    Lack of management skill needed to implement the measures
    Lack of familiarity with the measures on the part of the board members

    Undeveloped tools for analyzing the measures

    Question 19. 19. Which of the following is not a reason companies use key performance indicators?
    Align business activity with corporate strategy
    Improve company performance
    Improve timeliness of business decisions

    All of these answer choices are reasons companies use key performance indicators

    Question 20. 20. Qualitative indicators tend to be based on _______ .

    Feelings or accounting records.

    None of these answer choices are correct.
    Feelings or perceptions.
    Accounting records or perceptions.

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    Solution Summary

    This solution provides an explanation to questions based on management accounting.

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