Objective questions on organizational management

1. In a strongly centralized organization there is a large amount of freedom to make decisions at all levels of management.

            a. True

            b. False

2. Only those fixed costs labeled "common" are charged to the individual segments when preparing a segmented income statement.

            a. True

            b. False

3. A transfer price is the price charged when one segment of a company provides goods or services to another segment of the company.

            a. True

            b. False

4. A segment margin is computed by deducting variable and traceable fixed expenses from the sales of a segment.

            a. True

            b. False

5. Net operating income is earnings before interest and taxes.

            a. True

            b. False

6. If a cost must be arbitrarily allocated in order to be assigned to a particular segment, then that cost is a common cost.

            a. True

            b. False

7. ROI and residual income are tools used to evaluate managerial performance in profit centers.

            a. True

            b. False

8. Net operating income is income after interest and taxes.

            a. True

            b. False