The Following Data Are Taken from the Management Accounting Reports

question 130

Multiple Choice

The following data are taken from the management accounting reports of Dancer Co.: $$\begin{array} { l r r r } & { \text { Div. A } } & \text { Div. B } &{ \text { Div. C } } \\\text { Operating income } & \$ 3,600,000 & \$ 3,700,000 & \$ 2,700,000 \\\text { Total service department charges } & 3,400,000 & 2,100,000 & 2,200,000\end{array}$$ ? If an incentive bonus is paid to the manager who achieved the highest operating income before service department charges, it follows that:

• A) division A's manager is given the bonus.
• B) division B's manager is given the bonus.
• C) division C's manager is given the bonus.
• D) the managers of Divisions B and C divide the bonus.

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Definitions:

P Chart

A statistical chart, known as a control chart, used for monitoring the proportion of defectives in a process over time.

Expected Monetary Value

The predicted average outcome of a decision if it can be repeated many times.

Incentive Programs

Schemes designed to motivate and reward desired behaviors or performance from individuals or groups.

State of Nature

A term used in decision theory referring to the actual but possibly unknown status of the world, which affects the outcomes of decisions.