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ACCT 349 Week 7 Quiz Latest
ACCT 349 Week 7 Quiz Latest
Question 1. (TCO 8)
Which of the following is not a benefit associated with decentralization? (Points : 6)
Quicker decision making
Increased motivation of subunit managers
Increased competition among managers
Greater responsiveness to local needs
Question 2. (TCO 8)
The San Jose Manufacturing Company has two divisions in Kansas—the Holton Division and the Derby
Division. Currently, Derby buys a part (10,000 units) from Holton for $16 per unit. Holton has purchased
new equipment and wants to increase the price to Derby to $18 per unit. The controller of Derby claims
that she cannot afford to go that high, because it will decrease the division’s profit to near zero. Derby can
buy the part from an outside supplier for $16 per unit. The incremental costs per unit that San Jose incurs
to produce each unit are Holton’s variable cost of $12. Fixed costs per unit to Holton with the recent
purchase of equipment are $5.
If Holton has no alternative uses for its facilities and the external supplier drops the price to $11 per unit,
what should be done from the point of view of
Buy from the Holton Division/Buy from the external supplier.
Buy from the external supplier/Buy from Holton Division.
Buy from external supplier/ Buy from external supplier.
Buy from Holton Division/ Buy from Holton Division.
Question 3. (TCO 8)
Jesse James is a manager at a local bank. Jesse’s management style is best described as
entrepreneurial—he is risk neutral. Wyonia Tyus is a customer service representative who reports to
Jesse. Wyonia is risk averse. In designing a compensation package for Jesse and Wyonia, which type of
compensation arrangement should be emphasized more? Jesse
James/Wyonia Tyus (Points : 6)
Straight salary/Straight salary
Question 4. (TCO 8)
Information pertaining to the Woodsy Creek Division of MO Corporation for 20XX follows.
Variable costs 575,000
Traceable fixed costs 336,500
Average invested capital 350,000
Imputed interest rate 10%
The return on investment (ROI) was (Points : 6)
Question 5. (TCO 9)
The primary difference between centralization and decentralization is (Points : 6)
separate offices for all managers.
geographical separation of divisional headquarters and central headquarters.
the extent of freedom of decision making by many levels of management.
the relative size of the firm.