Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
expand_more
expand_more
format_list_bulleted
Textbook Question
Chapter 12, Problem 13MC
Which of the following measures the profitability of a division relative to the size of its investment in capital assets?
A. residual Income (RI)
B. sales margin
C.
D. economic value added (EVA)
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Discuss the following profitability ratios: Profit Margin, ROA-Return on Assets, ROI-Return on Investment, and the Gross Margin.
Why is the operating return on assets ratio also referred to as the operating returnon investment?
A. Which of the following is most closely associated with the cost of using assets?
a. Asset utilization
b. Sales revenue
c. Proportion of debt and equity
d. Average price
B. Which of the following is most closely associated with the return on management’s use of assets?
a. Cost of capital
b. Mix of equity types
c. Prime lending rate
d. # of products sold
Chapter 12 Solutions
Principles of Accounting Volume 2
Ch. 12 - Components of the organization that are...Ch. 12 - When managerial accountants design an evaluation...Ch. 12 - Goal congruence in well-designed performance...Ch. 12 - Responsibility accounting holds managers...Ch. 12 - Performance measures are only useful if _______....Ch. 12 - Which of the following is not a characteristic of...Ch. 12 - A good performance measurement system will align...Ch. 12 - What should an organization do if performance...Ch. 12 - A good performance measurement system will include...Ch. 12 - Without proper performance measures, goal...
Ch. 12 - Dixon Construction Materials has collected this...Ch. 12 - The cost of equity is _______. A. the interest...Ch. 12 - Which of the following measures the profitability...Ch. 12 - The capital structure of Ridley Enterprises Is:...Ch. 12 - Calculate the ROI for Gardner Chemical given the...Ch. 12 - Which of the following statements is false? A. The...Ch. 12 - The metrics based on nonfinancial information are...Ch. 12 - The metrics based on financial numbers produced by...Ch. 12 - People affected by decisions made by a company,...Ch. 12 - The owners of company stock are ______. A....Ch. 12 - Why might a manager focused solely on accounting...Ch. 12 - Is there a way to prevent managers from focusing...Ch. 12 - Should an organization focus on controllable or...Ch. 12 - What are the components of a strategic plan? Find...Ch. 12 - What are the four types of centers and their...Ch. 12 - What would be wrong with using two points of data...Ch. 12 - Compare and contrast short- and long-term goals...Ch. 12 - Can a short-term goal also be a long-term goal?...Ch. 12 - What does goal congruence mean? Provide an example...Ch. 12 - What are the six characteristics of a good...Ch. 12 - What is EVA and why is it superior to other...Ch. 12 - What are the drawbacks to ROI? Give examples of...Ch. 12 - Describe the history and purpose of the balanced...Ch. 12 - What are the characteristics of successful...Ch. 12 - For the following situations, identify whether the...Ch. 12 - For the following descriptions state whether the...Ch. 12 - Identify the type of responsibility center...Ch. 12 - Sara has just taken a job as the middle school...Ch. 12 - During the current year, Sokowski Manufacturing...Ch. 12 - During the current year, Sokowski Manufacturing...Ch. 12 - Assume Skyler Industries has debt of $4,500,000...Ch. 12 - Why do managers want a high ROI, and how would...Ch. 12 - Classify each of the following performance...Ch. 12 - For the following situations identify whether the...Ch. 12 - For the following descriptions, state whether the...Ch. 12 - Identify the type of responsibility center...Ch. 12 - Padma completed her doctoral degree and has taken...Ch. 12 - During the current year. Plainfield Manufacturing...Ch. 12 - During the current year, Plainfield Manufacturing...Ch. 12 - Assume Plainfield Manufacturing has debt of...Ch. 12 - Though a high ROI is desired, what are some...Ch. 12 - Classify each of the following performance...Ch. 12 - Match each of the following with its appropriate...Ch. 12 - Florentino Allers is the production manager of...Ch. 12 - Macon Mills is a division of Bolin Products. Inc....Ch. 12 - Jefferson Memorial Hospital is an investment...Ch. 12 - Crawfords Books and Things has a traditional...Ch. 12 - Coral Creations has strategic plans that call for...Ch. 12 - Match each of the following with its appropriate...Ch. 12 - Oleg Markov is the production manager of NASA...Ch. 12 - Evaluate the two departments for Moxie Products....Ch. 12 - Banyan Industries has two divisions, a tax rate of...Ch. 12 - Forty years ago, Vinfen was founded as a nonprofit...Ch. 12 - What combination of quantitative factors and...Ch. 12 - Josh OShea is the manager of the...Ch. 12 - Kanye Achebe just became the operations manager of...Ch. 12 - Which of the performance measures—ROI, RI, or...
Additional Business Textbook Solutions
Find more solutions based on key concepts
Horizontal analysis(Learning Objective 2)15-20 min What were the dollar and percentage changes in Rozzis Gift S...
Financial Accounting, Student Value Edition (5th Edition)
Methods of joint-cost allocation, comprehensive. Kardash Cosmetics purchases flowers in bulk and processes them...
Cost Accounting (15th Edition)
Calculate payments using time value of money concepts. (LO 8). For each of the following, calculate the payment...
Financial Accounting
Queen Sales, Inc. has just completed its first year of operations. The company has not had any sales to date. Q...
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
E8-13 Identifying internal controls
Learning Objective 1
Consider each situation separately. Identify the missi...
Horngren's Accounting (12th Edition)
Color Explosion prepares and packages paint products. Color Explosion has two departments: Blending and Packagi...
Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- A responsibility center structure that considers investments made by the operating segments by using a common cost of capital percentage is called_______. A. return on investment B. residual income C. a profit center D. a discretionary cost centerarrow_forwardhow value drivers (Return on Equity, Net Profit Margin, and Total Asset Turnover) are related to financial statement analysis?arrow_forwardWhat concept is critical in distinguishing an enterprise’s return on investment from return of its investment? Capital maintenance concept Current operating performance concept Comprehensive income concept Return on investment conceptarrow_forward
- The investment turnover is the ratio of a. operating income to sales b. sales to invested assets c. operating income to invested assets d. assets to liabilitiesarrow_forwardDiscuss the impact of the following ratios and usefulness to users of financial statements. Gross profit Margin Return on capital employed Operating profit (PBIT) percentage Asset turnover Gearing ratioarrow_forwardA responsibility center structure that considers investments made by the operating segments by using a common cost of capital percentage is called ________. A) residual income B) a profit center C) a discretionary cost center D) return on investmentarrow_forward
- Which of the following is NOT a profitability ratio? Select one:a. Return on Equityb. Net Profit Marginc. Return on Assetsd. Average Collection Periodarrow_forwardWhich of the following is NOT one of the ratios in Profitability group? Select one: a. Quick ratio b. Gross profit margin c. Return on Assets d. Operating profit marginarrow_forwardWhich of the following measures the number of dollars of sales produced per dollar of fixed assets? Multiple Choice fixed asset to working capital ratio fixed asset turnover ratio fixed asset management ratio sales to working capital ratioarrow_forward
- In the DuPont formula, return on assets equals: Multiple Choice Profit margin on sales x Inventory turnover. Profit margin on sales x Asset turnover. Gross margin on sales x Asset turnover. Gross margin on sales x Inventory turnover.arrow_forwardCalculating return on Investment for an Investment center is defined by the following formula: Multiple Cholce Income/Average invested assets. Contribution margin/Average invested assets. Contribution margin/Ending assets. Net income/Ending assets. Gross profit/Ending assets.arrow_forwardWhich of the following ROIs uses the income computed under the accrual basis? A. Accounting rate of Return (ARR) B. Internal rate of return (IRR) C. Payback reciprocal D. True rate of returnarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax CollegeCornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage LearningIntermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
- Survey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage LearningIntermediate Financial Management (MindTap Course...FinanceISBN:9781337395083Author:Eugene F. Brigham, Phillip R. DavesPublisher:Cengage LearningCollege Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:9781305961883
Author:Carl Warren
Publisher:Cengage Learning
Intermediate Financial Management (MindTap Course...
Finance
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
Economic Value Added EVA - ACCA APM Revision Lecture; Author: OpenTuition;https://www.youtube.com/watch?v=_3hpcMFHPIU;License: Standard Youtube License