1. 2. 3. A basic idea underlying is that a manager should be held responsible only for those items that the manager can actually control to a significant extent. A) participative budgeting B) planning and control C) responsibility accounting D) the master budget Managers of profit centers are responsible for: A) costs and investments. B) revenues and costs. C) costs, revenues, and investments. D) costs. The purpose of the balanced scorecard is best described as helping an organization: A) develop customer relations B) mobilize employee skills for continuous improvements in processing capabilities, quality, and response times C) introduce innovative products and services desired by target customers D) translate an organization's mission and strategy into a set of performance measures that help to implement the strategy The balanced Scorecard measures an organization's performance from all of the following perspectives EXCEPT: A) financial B) government C) customer D) learning and growth Hauber Corporation would like to use target costing for a new product it is considering introducing. At a selling price of $26 per unit, management projects sales of 60.000 units. The new product would require an investment of $300.000. The desired return on investment is 20%. How much is the target cost per unit? A) $25 5 B) $26 C) $24 D) $22 Answer Questions 6 and 7 using the information below: Penn Oil Corporation has two divisions, Refining and Production. The company's primary product is Luboil Oil. Each division's costs are provided below: Production: Variable costs per barrel of oil..... $9 Fixed costs per barrel of oil.........$6 Refining: Variable costs per barrel of oil..... $30 Fixed costs per barrel of oil.........$36 6. What is the transfer price per barrel from the Production Division to the Refining Division, assuming the method used to place a value on each barrel of oil is 110% of full costs? A) $16.50 B) $66.00 C) $72.60 D) $89.10 7 Assume 200 barrels are transferred from the Production Division to the Refining Division for a transfer price of $18 per barrel. The Refining Division sells the 200 barrels at a price of $120 each to customers. What is the operating income of both divisions together? A) $7,200 B) $7,800 C) $10,800 D) $20,400 8. Which of the following strategies is used to deal with uncertainty related to price risk? A) Statistical analysis B) Cost restructuring C) Hedging D) Insurance 9. In a responsibility accounting system, costs are classified into categories on the base of: A) Fixed and variable costs. B) Prime and overhead costs. C) Administrative and non-administrative costs. D) Controllable and noncontrollable costs 10. Which is the most expensive category of Quality Cost? A) Appraisal costs B) Prevention Cost C) Internal failure costs D) External failure costs