23. A manufacturing plant of a company would be considered as: a. A cost center
ID: 2596528 • Letter: 2
Question
23. A manufacturing plant of a company would be considered as: a. A cost center b. A profit center. c. An investment center. d. A revenue center 24. Which of the following is NOT true of the balanced scorecard approach to it includes financial and nonfinancial measures the a. b· the measures should be linked such that improvement on one measure should lead to improvement in related measures measures developed must match the company's strategy and vision hould lead to c. d. a standard balanced scorecard can be developed to suit all organizations 25. In considering effectiveness of a company's internal processes, the balanced scorecard method will look at a. Customer retention b. R&D; costs c. Residual income d. Employee turnover rate 26. Select the correct statement regarding relevant revenues. a. b. c. d. Relevant revenues must not differ between the alternatives being considered. Past revenues may be relevant. Relevant revenues must make a difference in the decision under consideration. Revenues that are relevant in one decision context are always relevant in other decision contexts 27. Select the correct statement regarding opportunity costs. Opportunity costs need not be considered in decision making b. a. Opportunity costs represent sunk costs. Opportunity costs are relevant for decision-making purposes. d. c. Opportunity costs represent unavoidable costs. 28. A study has been conducted to determine if Product A should be dropped. Sales of the product total $200,000 per year, variable expenses total $140,000 per year. Fixed expenses charged to the product total $90,000 per year. The company estimates that $40,000 of these fixed expenses will continue even if the product is dropped. These data indicate that if Product A is dropped, the company's overall net operating income would a. decrease by $20,000 per year b. increase by $20,000 per year c. decrease by $10,000 per year d. increase by $30,000 per yearExplanation / Answer
23.
Right answer is a. A cost center
A manufacturing plant of a company would be considered as a cost centre. Because it generates cost for the company.
24.
Right answer is c.
It is not true that the measure should be linked such that improvement on one measure should lead to improvement in related measures.
25.
Right answer is a.
Customer retention.
27.
Right answer is c.
Opportunity costs are relevant for decision making purposes.
28.
Right answer is c.
Company's overall net operating income would decrease by $10,000 per year.
$200,000-140,000-50,000 = $10,000 (Profit)
$40,000 is not relevant for decision making.
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