Solved by a verified expert :1.
Question : (TCO 8) Which of the
following is not a benefit associated with decentralization?
Quicker decision making
Increased motivation of subunit managers
Increased competition among managers
Greater responsiveness to local needs
Question
2. Question : (TCO 8) The San Jose Manufacturing Company has two divisions in
Kansas—the Holton Division and the Derby Division. Currently, Derby buys a part
(10,000 units) from Holton for $16 per unit. Holton has purchased new equipment
and wants to increase the price to Derby to $18 per unit. The controller of
Derby claims that she cannot afford to go that high, because it will decrease
the division’s profit to near zero. Derby can buy the part from an outside
supplier for $16 per unit. The incremental costs per unit that San Jose incurs
to produce each unit are Holton’s variable cost of $12. Fixed costs per unit to
Holton with the recent purchase of equipment are $5. If Holton has no
alternative uses for its facilities and the external supplier drops the price
to $11 per unit, what should be done from the point of view of Company as a
whole/Derby Division only?
Buy from
the Holton Division/Buy from the external supplier.
Buy from
the external supplier/Buy from Holton Division.
Buy from
external supplier/ Buy from external supplier.
Buy from
Holton Division/ Buy from Holton Division.
Question
3. Question : (TCO 8) Jesse James is a manager at a local bank. Jesse’s
management style is best described as entrepreneurial—he is risk neutral.
Wyonia Tyus is a customer service representative who reports to Jesse. Wyonia
is risk averse. In designing a compensation package for Jesse and Wyonia, which
type of compensation arrangement should be emphasized more? Jesse
James/Wyonia Tyus
Performance-based/Performance-based
Performance-based/Straight
salary
Straight
salary/Performance-based
Straight
salary/Straight salary
Question
4. Question : (TCO 8) Information pertaining to the Woodsy Creek Division of MO
Corporation for 20XX follows.
Revenues
$950,000 Variable costs 575,000 Traceable fixed costs 336,500 Average invested
capital 350,000 Imputed interest rate 10%
The
residual income was
$3,500.
$35,000.
$38,500.
$0.
Question
5. Question : (TCO 9) Which of the following is likely to be a disadvantage of
decentralization?
Lower-level employees will develop less
rapidly than in a centralized organization.
Lower-level employees will complain about not
having enough to do.
Top management will have less time available
to devote to unique problems.
Lower-level managers may make conflicting
decisions.
