Question

9-A well designed responsibility center will include the following types except for: Select one:

(a.) cost center (b.) revenue center (c). proftit center (d.) investment center (e.) diversification center

10- Segmented reporting can be made by all except:Select one:

a. division

b. product or product line

c. outsourcing agents

d. service center

e. sales person

11.

Rate of Return on Investment (ROI) breaks down into margin and turnover which reveals where enhancing actions can be taken in the following:

Select one:

a. improve margin

b. improve turnover

c. improve both margin and turnover

d. all of the above

e. none of the above

12-

Improving Economic Value Added (EVA) can be achieved by:

Select one:

a. invest capital in high-performing projects

b. use less capital

c. increase profit without using more capital

d. all of the above

e. none of the above

Answer 1

9. A well designed responsibility center will not include a cost centre, a revenue center, an investment center, and a diversification center but not a profit center. Thus, profit center is not a requirement of a well-designed responsibility Center . Option (c) is the correct option.   

10. Segmented reported cannot be made by a division as it is a segment in itself. Thus, option (a) is the correct option.

11. Improve margin is the action that can be taken from rate of return on investment. Option (a) is the right answer.

12. Improving Economic value added can be achieved by investing in high performing project, use less capital and increase profit without using more capital. Thus, option (d) is the correct answer, i.e. all of the above.