Question 31. Production or support SBUs within the

29 Jun Question 31. Production or support SBUs within the

Question
31. Production or support SBUs within the firm that have the goal of providing the best quality product or service at the lowest cost are:

A. Revenue centers.

B. Contribution centers.

C. Profit centers.

D. Cost centers.

E. Investment centers.

32. SBUs that generate revenues and incur the major portion of the cost for producing those revenues are:

A. Revenue centers.

B. Contribution centers.

C. Profit centers.

D. Cost centers.

E. Investment centers.

33. SBUs that include the assets they employ as well as profits in the performance evaluation are:

A. Revenue centers.

B. Contribution centers.

C. Profit centers.

D. Cost centers.

E. Investment centers.

34. The replacing of controllable costs with non-controllable costs by a department is:

A. Budget slack.

B. Cost shifting.

C. Outsourcing.

D. Discretionary-cost method.

E. Engineered-cost approach.

35. For production and support departments, a method of implementing cost centers that is input-oriented is the:

A. Budget slack.

B. Cost shifting approach.

C. Outsourcing approach.

D. Discretionary-cost method.

E. Engineered-cost approach.

36. For production and support departments, a method of implementing cost centers that is output-oriented is the:

A. Budget slack method.

B. Cost shifting approach.

C. Outsourcing approach.

D. Discretionary-cost method.

E. Engineered-cost approach.

37. Expenditures of revenue centers usually include:

A. Order-purchasing costs.

B. Order-getting costs.

C. Order-producing costs.

D. Order-scheduling costs.

E. Order-delivering costs.

38. The balanced scorecard measures the SBU’s performance in all of the following areas except:

A. Learning and growth.

B. Managerial performance.

C. Customer satisfaction.

D. Internal business processes.

E. Accounting and tax compliance.

39. Bilbo owned two adjoining restaurants, the Pork Palace and the Chicken Hut. Each restaurant was treated as a profit center for performance evaluation purposes. Although the restaurants had separate kitchens, they shared a central baking facility. The principal costs of the baking area included materials, supplies, labor, and depreciation and maintenance on the equipment. Bilbo allocated the monthly costs of the baking facility to the two restaurants based on the number of tables served in each restaurant during the month using dual allocation and equal sharing of fixed costs. In April, the costs were $40,000, of which $16,000 were fixed. The Pork Palace served 4,400 tables, while the Chicken Hut served 3,600 tables.

The amount of joint cost that should have been allocated to the Pork Palace in April is calculated to be:

A. $8,000.

B. $10,800.

C. $13,200.

D. $18,800.

E. $21,200.