A division reports sales of $1,200,000, an operating margin of 12%, and average operating assets of $900,000. Using operating income divided by average operating assets, what is the division's return on investment?
A. 16.0%
B. 12.0%
C. 13.3%
D. 75.0%
Source: PRIMARY -- Section 9.3, Investment Centers subsection and ROI formula (https://openstax.org/books/principles-managerial-accounting/pages/9-3-describe-the-types-of-responsibility-centers)
A planning system imports unit-demand forecasts from regional spreadsheets. One file contains text in a numeric quantity field and another contains 900,000 units where the approved range is 0–90,000. Which preventive control most directly addresses both errors before the forecasts enter the model?
A. Reconcile total actual sales after the reporting period
B. Back up the model after each successful forecast run
C. Encrypt every spreadsheet while it is stored
D. Validate field type and approved numerical range at import
Source: PRIMARY -- NIST SP 800-53 Rev. 5, control SI-10 Information Input Validation (https://csrc.nist.gov/pubs/sp/800/53/r5/upd1/final)
At the end of March, a company learns that a key material will remain 9% more expensive through December and that expected unit volume has fallen. Management wants an updated twelve-month outlook while preserving the original annual budget as the performance baseline. Which sequence is most appropriate?
A. Overwrite the approved annual budget with actual March results, then hold all remaining assumptions constant
B. Update the rolling forecast; retain the approved budget as the performance baseline
C. Prepare only a cash budget because revised operating assumptions should not affect forecasted income
D. Delay any update until year-end so the original budget and latest forecast cannot differ
Source: PRIMARY -- Section 7.5, budget-to-actual evaluation and variance analysis (https://openstax.org/books/principles-managerial-accounting/pages/7-5-explain-how-budgets-are-used-to-evaluate-goals)
A product has a budgeted selling price of $30 and variable cost of $18 per unit. The company budgeted 10,000 units but sold 12,000 units; fixed costs were unchanged. What is the favorable operating-income effect attributable solely to the 2,000-unit volume increase?
A. $60,000 favorable
B. $36,000 unfavorable
C. $24,000 favorable
D. $20,000 favorable
Source: PRIMARY -- Section 3.1, contribution margin per unit and total contribution margin (https://openstax.org/books/principles-managerial-accounting/pages/3-1-explain-contribution-margin-and-calculate-contribution-margin-per-unit-contribution-margin-ratio-and-total-contribution-margin)
A division earns $240,000 on average operating assets of $1,500,000. The company requires 12%. A proposed project would earn 14% on $500,000 of additional assets. If the manager is evaluated on residual income, what is the project's effect and the economically consistent decision?
A. Residual income decreases by $10,000; reject
B. Residual income increases by $10,000; accept
C. Residual income increases by $70,000; accept
D. Residual income is unchanged because the project's ROI is below the division's current ROI
Source: PRIMARY -- Section 12.3, Calculation and Interpretation of Residual Income (https://openstax.org/books/principles-managerial-accounting/pages/12-3-evaluate-an-operating-segment-or-a-project-using-return-on-investment-residual-income-and-economic-value-added)
