List and briefly discuss the two limitations of financial performance measures
What will be an ideal response
Measurement issues-Both the return on investment and residual income calculations use the term average total assets. Management must decide whether to use a simple average, which assets should be included, and whether the gross or the net book value should be used.
Short-term focus-Financial performance measures have a short-term focus. This focus may cause managers to make decisions that increase measures in the short term but hurt the company in the long term.
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Sales Discounts is classified as what type of account?
a. an expense b. a revenue c. a contra-asset d. a contra-revenue
The Engine Division of Magnificent Motor Corporation uses 5,000 carburetors per month in its production of automotive engines. It presently buys all of the carburetors it needs from two outside suppliers at an average cost of $100 . The Carburetor Division of Magnificent Motor Corporation manufactures the exact type of carburetor that the Engine Division requires. The Carburetor Division is
presently operating at its capacity of 15,000 units per month and sells all of its output to a foreign car manufacturer at $106 per unit. Its cost structure (on 15,000 units) is: Variable production costs $70 Variable selling costs 10 All fixed costs 10 Assume that the Carburetor Division would not incur any variable selling costs on units that are transferred internally. Refer to Magnificent Motor Corporation. What is the maximum of the transfer price range for a transfer between the two divisions? a. $106 b. $100 c. $90 d. $70
R&R, Inc entered into a contract with Scott, an agent, under the terms of which Scott would receive $20,000 if he stole trade secrets from the leading competitor of R&R. Scott performed his end of the agreement by delivering the trade secrets. If R&R now refuses to pay Scott for his services, Scott:
A) may recover based upon the express contract of the parties. B) may recover based upon a quasi-contractual theory in order to prevent the unjust enrichment of R&R. C) will be unable to recover, because this is an illegal contract. D) will be able to recover based upon promissory estoppel, because he has detrimentally relied upon the promises made by R&R.
A technique using artificial intelligence to upgrade the quality of raw data is called:
A) dumping. B) data reconciliation. C) completion backwards updates. D) data scrubbing.