Matching Quiz

Match the following terms to its definitions.


1				Decentralized organization


2				Traceable fixed costs


3				Common fixed cost


4				Segment margin


5				Responsibility centre


6				Cost centre


7				Profit centre


8				Investment centre


9				Return on investment (ROI)


10				Operating income


11				Operating assets


12				Margin


13				Turnover


14				Residual income


15				Economic value added (EVA®)


16				Balanced scorecard


17				Corporate social responsibility (CSR)


18				Transfer price


19				Negotiated transfer price


20				Range of acceptable transfer prices


21				Market price


22				Intermediate market


23				Quality of conformance


24				Quality cost


25				Prevention costs


26				Quality circles


27				Statistical process control


28				Appraisal costs


29				Internal failure costs


30				External failure costs


31				Quality cost report


32				Reciprocal method

Answer choices for questions 1 through 32

A)	Any business segment whose manager has control over cost or profit or the use of investment funds.
B)	A business segment whose manager has control over cost but has no control over revenue or the use of investment funds.
C)	The price being charged for an item on the open (intermediate) market.
D)	Costs incurred to keep defects from occurring.
E)	Operating income divided by sales.
F)	A report that details prevention costs, appraisal costs, and the costs of internal and external failures.
G)	An organization in which decision making is spread throughout the organization rather than being confined to a few top executives.
H)	Costs that are incurred as a result of identifying defective products before they are shipped to customers.
I)	Costs that are incurred to prevent defective products from reaching customers or that are incurred as a result of defective units.
J)	A business segment whose manager has control over cost and revenue but has no control over the use of investment funds.
K)	Operating income divided by average operating assets. ROI also equals margin multiplied by turnover.
L)	The degree to which a product or service meets or exceeds its design specifications and is free of defects or other problems that mar its appearance or degrade its performance.
M)	Small groups of employees who meet on a regular basis to discuss ways of improving quality.
N)	A margin obtained by deducting a segment's traceable fixed costs from the segment's contribution margin.
O)	Fixed costs that can be identified with a particular segment and that arise because of the existence of the segment.
P)	A concept whereby organizations consider the needs of all stakeholders when making decisions.
Q)	A transfer price agreed on between buying and selling divisions.
R)	A fixed cost that supports the operations of more than one segment but is not traceable in whole or in part to any one segment.
S)	A charting technique used to monitor the quality of work being done at a workstation for the purpose of immediately correcting any problems.
T)	An integrated set of performance measures that is derived from and supports the organization's strategy.
U)	A market in which a transferred product or service is sold in its present form to outside customers.
V)	Costs that are incurred to identify defective products before the products are shipped to customers.
W)	Income before interest and income taxes have been deducted.
X)	The amount of sales generated in an investment centre for each dollar invested in operating assets. Sales divided by average operating assets.
Y)	The operating income that an investment centre earns above the required return on its operating assets.
Z)	A concept similar to residual income.
AA)	The price charged when one division or segment provides goods or services to another division or segment of an organization.
AB)	The range of transfer prices within which the profits of both the selling division and the purchasing division would increase as a result of a transfer.
AC)	Costs that are incurred when a product or service that is defective is delivered to a customer.
AD)	A method of allocating service department costs that gives full recognition to interdepartmental services.
AE)	A business segment whose manager has control over cost and revenue and also has control over the use of investment funds.
AF)	Cash, accounts receivable, inventory, plant and equipment, and all other assets held for productive use in an organization.

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