TRUE OR FALSE

12. ____ The Detail Budget covers all phases of a companys operations.

13. ____ The ABC and ABB are different.

14. ____ The process of assigning the costs in the cost pool to the cost objects is called cost distribution.

15. ____ Cost Allocation is the process of assigning the costs in the cost pool to the cost objects.

16. ____ An allocation base is a measure of activity, physical characteristic, or economic characteristic that is associated with the responsibility centers, which are the cost objects in the allocation process.

17. ____ One Behavioral Effects of Responsibility Accounting is Motivating Desired Attitude in Employees.

18. ____ A segment is any part or activity of an organization about which a manager seeks cost, revenue, or profit data.

19. ____ Segmented reporting refers to the preparation of accounting reports by segment and for the organization as a whole.

20. ____ One Key Features of Segmented Reporting is Income Tax.

21. ____ Controllable and Uncontrollable Costs: A cost that can be significantly influenced by a manager is a controllable cost.

22. ____ Quality costs include the follows: Prevention costs, Appraisal costs, Internal failure costs, and External failure costs.

23. ____ The opportunity cost of lost sales and decreased market share cant represent a significant hidden cost.

24. ____ Delegation of decision making often occurs as an organization keep growing.

25. ____ Decentralization advantages allow organization to respond more quickly to events.

26. ____ Decentralization advantages Frees top management from day-to-day operating activities.

27. ____ Decentralization advantages Uses specialized knowledge and skills of managers.

28. ____ Decentralization Challenge is to get Goal Congruence.

29. ____ Managers can make decisions that don not affect both profit and invested capital.

30. ____ ROI means Ratio of Income.

31. ____ ROI measures the Income Invested Capital.

32. ____ ROI can be calculated multiplying the Sales Margin by the Capital Turnover.

33. ____ Income Sales Revenue is the Sales Margin.

34. ____ Sales Revenue Invested Capital is also known as the Capital Turnover.

35. ____ Economic value added tells us how much shareholder wealth is being created.

36. ____ Residual income encourages managers to make profitable investments that would be accepted by managers using ROI.

37. ____ Residual Income is the Investment Center Profit minus the Invested Charge.

38. ____ The Investment Charge is calculated multiplying the Investment Capital by the Interest Rate Imputed.

39. ____ One of the Issues faced measuring Investment Capital is determine what assets should be included.

40. ____ The Inflation Effect increase the current cost of assets impacting the amount of Invested Capital and decreasing the Income.