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Submitted By sweetpea4
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Managerial Accounting – Exam 4
Summer 2006

Student Number: __________________________

Pledge:

On my honor I have neither given or received help on this exam. I understand that any violation of the University Honor Policy will result in an automatic zero on this exam, and that I will be subject to all sanctions available under the University's Honor Policy.

Part I - Multiple Guess (135 points)

1. A segment of a business responsible for both revenues and expenses would be called: A) a cost center. B) an investment center. C) a profit center. D) residual income.

2. Lanta Restaurant compares monthly operating results with a static budget prepared at the beginning of the year. When actual sales are less than budget, would the restaurant usually report favorable variances on variable food costs and fixed supervisory salaries?

| |Food Costs |Supervisory Salaries |
|A) |No |No |
|B) |No |Yes |
|C) |Yes |No |
|D) |Yes |Yes |

3. All other things equal, a company's return on investment (ROI) would generally increase when: A) average operating assets increase. B) sales decrease. C) operating expenses decrease. D) operating expenses increase.

4. The performance of the manager of Division A is measured by residual income. Which of the following would increase the manager's performance measure? A) Increase in average operating assets. B) Decrease in average operating assets. C) Increase in minimum required return. D) Decrease in net operating income.

5.

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