Question 1

A company's return on investment is affected by a change in

Accepted Answer

A) Yes Yes 
B) Yes No 
C) No No 
D) No Yes 
A) Yes Yes 
B) Yes No 
C) No No 
D) No Yes A

Question 2

When inventory sits idle in a department,this would not affect the department's

Accepted Answer

A) processing time. 
B) throughput. 
C) process quality yield. 
D) dollar days. 
A) processing time. 
B) throughput. 
C) process quality yield. 
D) dollar days. C

Question 3

Residual income is the

Accepted Answer

A) contribution margin of an investment center,less the imputed interest on the invested capital used by the center. 
B) contribution margin of an investment center,plus the imputed interest on the invested capital used by the center. 
C) income of an investment center,less the imputed interest on the invested capital used by the center. 
D) income of an investment center,plus the imputed interest on the invested capital used by the center. 
A) contribution margin of an investment center,less the imputed interest on the invested capital used by the center. 
B) contribution margin of an investment center,plus the imputed interest on the invested capital used by the center. 
C) income of an investment center,less the imputed interest on the invested capital used by the center. 
D) income of an investment center,plus the imputed interest on the invested capital used by the center. C

Question 4

In selecting non-financial performance measures managers should choose measures that reflect

Accepted Answer

A) qualitative characteristics that point out sub-optimization activities and throughput bottlenecks. 
B) both short-term and long-term measures related to critical success factors. 
C) long-term supplier satisfaction levels. 
D) short-term financial viability. 
A) qualitative characteristics that point out sub-optimization activities and throughput bottlenecks. 
B) both short-term and long-term measures related to critical success factors. 
C) long-term supplier satisfaction levels. 
D) short-term financial viability.

Question 5

Which of the following would be considered a non-financial performance measurement?

Accepted Answer

A) increase in market share 
B) variances from standards 
C) number of customer complaints 
D) cost of engineering changes 
A) increase in market share 
B) variances from standards 
C) number of customer complaints 
D) cost of engineering changes

Question 6

A measure of profit produced above the cost of capital is referred to as ___________________________________.
or

Accepted Answer

economic v

Question 7

Houston Company Freeport Division of the Houston Company has the following statistics for its most recent operations:
  Refer to Houston Company.Compute EVA assuming the cost of capital is 10% and the tax rate is 40%.

Accepted Answer

A) $ 90,000 
B) $ 150,000 
C) $0 
D) $ (60,000) 
A) $ 90,000 
B) $ 150,000 
C) $0 
D) $ (60,000)

Question 8

Process quality yield reflects the proportion of

Accepted Answer

A) good units to bad units. 
B) time required to produce a good unit. 
C) total units manufactured that are good. 
D) total time spent to time available. 
A) good units to bad units. 
B) time required to produce a good unit. 
C) total units manufactured that are good. 
D) total time spent to time available.

Question 9

Presently,the Comic Book Division of Anderson Publishing Corporation has a profit margin of 30%.If total sales rise by $100,000,the net result will be

Accepted Answer

A) an increase in the profit margin ratio to above 30%. 
B) a decrease in the profit margin ratio to below 30%. 
C) no change in the profit margin ratio. 
D) a change in the profit margin ratio that cannot be determined from this information. 
A) an increase in the profit margin ratio to above 30%. 
B) a decrease in the profit margin ratio to below 30%. 
C) no change in the profit margin ratio. 
D) a change in the profit margin ratio that cannot be determined from this information.

Question 10

Managers should be paid

Accepted Answer

A) on a periodic basis. 
B) based on results achieved. 
C) using ESOPs. 
D) on a piece rate basis. 
A) on a periodic basis. 
B) based on results achieved. 
C) using ESOPs. 
D) on a piece rate basis.

Question 11

Division A's investment in a new project will raise the overall organization's return on investment if
A :

Accepted Answer

A) the return on investment on the new project exceeds the target return of the overall organization. 
B) the return on investment on the new project exceeds the return on investment of Division 
C) the return on investment on the new project exceeds the overall organization's return on investment. 
D) Division A's return on investment exceeds the return on investment of the overall organization. 
A) the return on investment on the new project exceeds the target return of the overall organization. 
B) the return on investment on the new project exceeds the return on investment of Division 
C) the return on investment on the new project exceeds the overall organization's return on investment. 
D) Division A's return on investment exceeds the return on investment of the overall organization.

Question 12

Using a single performance evaluation criterion for an investment center

Accepted Answer

A) is most effective because a manager can concentrate on a single goal. 
B) can result in manipulation of the performance measure. 
C) allows multinational investment centers' performances to be equitably compared. 
D) is only appropriate if the criterion is non-monetary. 
A) is most effective because a manager can concentrate on a single goal. 
B) can result in manipulation of the performance measure. 
C) allows multinational investment centers' performances to be equitably compared. 
D) is only appropriate if the criterion is non-monetary.

Question 13

Define residual income.Evaluate residual income as a measure of performance.

Accepted Answer

Residual income is the remainder of net

Question 14

Non-financial measures are generally more appropriate for gauging teamwork than are financial performance measures.

Accepted Answer

A) True 
 B)False

Question 15

An increase in productive processing time will increase

Accepted Answer

A) throughput. 
B) process yield. 
C) return on investment. 
D) productive capacity. 
A) throughput. 
B) process yield. 
C) return on investment. 
D) productive capacity.

Question 16

Internal performance measures focus on the efficiency and effectiveness of an organization's production process.

Accepted Answer

A) True 
 B)False

Question 17

What are some common problems encountered in determining ROI?

Accepted Answer

Net income and investment involved can b

Question 18

Merit pay is

Accepted Answer

A) a contingent amount of pay that is earned by managers whose subunits meet a target rate of return. 
B) always for a limited period of time and must be re-earned each period. 
C) any pay earned when the company is profitable. 
D) a pay increment received when a specific performance level is achieved. 
A) a contingent amount of pay that is earned by managers whose subunits meet a target rate of return. 
B) always for a limited period of time and must be re-earned each period. 
C) any pay earned when the company is profitable. 
D) a pay increment received when a specific performance level is achieved.

Question 19

Jaguar Division of Automobile Delights,is evaluated based on residual income generated.In the most recent year,the Jaguar Division generated a residual income of $2,000,000 and net income of $5,000,000.The target rate of return for all divisions of Automobile Delights is 20%.What was the return on investment for the Jaguar Division?

Accepted Answer

A) 40% 
B) 13% 
C) 20% 
D) 33% 
A) 40% 
B) 13% 
C) 20% 
D) 33%

Question 20

The Statement of Cash Flows may be superior to the cash budget as a performance evaluation measure because

Accepted Answer

A) cash flows are shown on the accrual basis on the cash budget. 
B) the cash budget does not include capital investments. 
C) cash flows are arranged by activity. 
D) of all the above reasons. 
A) cash flows are shown on the accrual basis on the cash budget. 
B) the cash budget does not include capital investments. 
C) cash flows are arranged by activity. 
D) of all the above reasons.

A company's return on investment is affected by a change in

When inventory sits idle in a department,this would not affect the department's

Residual income is the

In selecting non-financial performance measures managers should choose measures that reflect

Which of the following would be considered a non-financial performance measurement?

A measure of profit produced above the cost of capital is referred to as ___________________________________. or

Houston Company Freeport Division of the Houston Company has the following statistics for its most recent operations: Refer to Houston Company.Compute EVA assuming the cost of capital is 10% and the tax rate is 40%.

Process quality yield reflects the proportion of

Presently,the Comic Book Division of Anderson Publishing Corporation has a profit margin of 30%.If total sales rise by $100,000,the net result will be

Managers should be paid

Division A's investment in a new project will raise the overall organization's return on investment if A :

Using a single performance evaluation criterion for an investment center

Define residual income.Evaluate residual income as a measure of performance.

Non-financial measures are generally more appropriate for gauging teamwork than are financial performance measures.

An increase in productive processing time will increase

Internal performance measures focus on the efficiency and effectiveness of an organization's production process.

What are some common problems encountered in determining ROI?

Merit pay is

The Statement of Cash Flows may be superior to the cash budget as a performance evaluation measure because

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Predetermined Overhead Rates, flexible Budgets, and Absorptionvariable Costing

Activity-Based Management and Activity-Based Costing

Job Order Costing

Process Costing

Standard Costing and Variance Analysis

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting, support Department Allocations, and Transfer Pricing

Capital Budgeting

Managing Costs and Uncertainty

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters

Exam 14: Performance Measurement, balanced Scorecards, and Performance Rewards

A company's return on investment is affected by a change in

When inventory sits idle in a department,this would not affect the department's

Residual income is the

In selecting non-financial performance measures managers should choose measures that reflect

Which of the following would be considered a non-financial performance measurement?

A measure of profit produced above the cost of capital is referred to as ___________________________________. or

Houston Company Freeport Division of the Houston Company has the following statistics for its most recent operations: Refer to Houston Company.Compute EVA assuming the cost of capital is 10% and the tax rate is 40%.

Process quality yield reflects the proportion of

Presently,the Comic Book Division of Anderson Publishing Corporation has a profit margin of 30%.If total sales rise by $100,000,the net result will be

Managers should be paid

Division A's investment in a new project will raise the overall organization's return on investment if A :

Using a single performance evaluation criterion for an investment center

Define residual income.Evaluate residual income as a measure of performance.

Non-financial measures are generally more appropriate for gauging teamwork than are financial performance measures.

An increase in productive processing time will increase

Internal performance measures focus on the efficiency and effectiveness of an organization's production process.

What are some common problems encountered in determining ROI?

Merit pay is

The Statement of Cash Flows may be superior to the cash budget as a performance evaluation measure because

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Predetermined Overhead Rates, flexible Budgets, and Absorptionvariable Costing

Activity-Based Management and Activity-Based Costing

Job Order Costing

Process Costing

Standard Costing and Variance Analysis

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting, support Department Allocations, and Transfer Pricing

Capital Budgeting

Managing Costs and Uncertainty

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters