Responsibility
Accounting
Accounting
The responsibility accounting systems link...
What are lower-level managers' decision making authority with accountability for outcomes?
The formula for ROI...
What is net operating income (NOI)/average operating assets?
The two components of ROI are...
What are Margin and Turnover?
True or False?
ROI is best used alone
What is false?
This is better used as a component to the balanced scorecard, not as an individual entity.
What are cost centers, profit centers, and investment centers?
Alpha's ROI from this data is ...
Sales $232,500
NOI $13,950
Average Operating Assets: $386,000
What is 3.61%?
NOI (13,950) / Average Operating (386,000)
The Margin formula is ...
What is Net Operating Income (NOI)/Sales?
ROI is used to evaluate the responsibility center...
What is investment center performance?
In a cost center, a manager has control over...
What are costs, but NOT revenue or investments?
examples include:accounting, general administration, legal, personnel, and manufacturing facilities.
Bravo's ROI from this data is ...
Sales $307,500
NOI $36,900
Average Operating Assets: $123,000
What is 30%?
NOI (36,900) / Average Operating (123,000)
The Turnover formula is...
What is Sales/Average Operating Assets?
Using ROI to assess managers who takeover a business segment can be hard because...
What is they typically inherit many committed costs over which they have no control over.
It is harder to assess the manager relative to other managers.
In a profit center, a manger has control over...
What are BOTH costs and revenue?
- evaluated comparing actual to targeted or budgeted profit
Charli's ROI from this data is ...
Sales $215,000
NOI $47,300
Average Operating Assets: $215,000
What is 22%?
NOI (47,300) / Average Operating (215,000)
The formula for ROI using these two components is...
What is Margin x Turnover?
NOI/sales*sales/average operating assets
A manager evaluating simply on ROI may...
What is reject investment opportunities profitable for the whole company but not the specific segment?
In an investment center, the manager has control over...
What are cost, revenue, and investments?
- they are evaluated used return on investment (ROI) or residual income.
If Charli's NOI increase by $40,000, inventory increases by $25,000, and cash increase by $15,000, what is the change in ROI from their original data?
Sales $215,000
NOI $47,300
Average Operating Assets: $215,000
What is 12.24 %?
New NOI $87,300
New Average Operating Assets: $255,000
New ROI = 34.24%
Old ROI = 22%
Using the data below, the margin, turnover, and ROI for this company is ...
Sales: $7,600,000
Net Operating Income: $810,000
Average Operating Assets: $11,200,000
What is margin of 10.66%
What is turnover of .68?
What is ROI of 7.25%?
The main component of criticism of ROI is...
What is it does not account for the company as a whole or company objectives?