Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Residual income is used as a performance measure in

Accepted Answer

A)  profit centers. 
B)  cost centers. 
C)  investment centers. 
D)  revenue centers. 
A)  profit centers. 
B)  cost centers. 
C)  investment centers. 
D)  revenue centers.

Question 3

Which of the following is the throughput measure?

Accepted Answer

A)  Processing time/Total time 
B)  Good units/Total time 
C)  Good units/Processing time 
D)  Total units/Total time 
A)  Processing time/Total time 
B)  Good units/Total time 
C)  Good units/Processing time 
D)  Total units/Total time

Question 4

The number of good units or quantity of services that are produced and sold by an organization within a specified time is referred to as ____________________.

Accepted Answer

The answer of The number of good units or quantity...

Question 5

A primary purpose of a balanced scorecard is to give

Accepted Answer

A)  managers a way to judge past performance. 
B)  stockholders a way to judge current performance. 
C)  managers a way to forecast future performance. 
D)  stockholders a way to tie strategy to profitability. 
A)  managers a way to judge past performance. 
B)  stockholders a way to judge current performance. 
C)  managers a way to forecast future performance. 
D)  stockholders a way to tie strategy to profitability.

Question 6

Residual income is an example of a ____ performance measurement.

Accepted Answer

A)  long-term 
B)  short-term 
C)  qualitative 
D)  profit center 
A)  long-term 
B)  short-term 
C)  qualitative 
D)  profit center

Question 7

An organization's values statement identifies fundamental beliefs about what is important to the organization.

Accepted Answer

A) True 
 B)False

Question 8

Return on investment is computed by dividing income by

Accepted Answer

A)  contribution margin. 
B)  inventory turnover. 
C)  assets invested. 
D)  average assets employed. 
A)  contribution margin. 
B)  inventory turnover. 
C)  assets invested. 
D)  average assets employed.

Question 9

Arkansas Company Arkansas Co. has established a target rate of return of 16% for all divisions. For the most recent year, Little Rock Division generated sales of $10,000,000 and expenses of $7,500,000. Total assets at the beginning of the year were $5,000,000 and total assets at the end of the year were $7,000,000.
Refer to Arkansas Company. For the most recent year, what was Little Rock Division's return on investment?

Accepted Answer

A)  20.83% 
B)  35.71% 
C)  41.67% 
D)  50.00% 
A)  20.83% 
B)  35.71% 
C)  41.67% 
D)  50.00%

Question 10

The information below relates to costs, revenues, and assets anticipated in the Shoe Division of BVD Footwear Corporation:   How would each of the following measures be affected if sales rise by $5,000 in the Shoe Division?

Accepted Answer

A)  increase increase increase 
B)  increase no change increase 
C)  increase increase no change 
D)  no change no change increase 
A)  increase increase increase 
B)  increase no change increase 
C)  increase increase no change 
D)  no change no change increase

Question 11

Arkansas Company Arkansas Co. has established a target rate of return of 16% for all divisions. For the most recent year, Little Rock Division generated sales of $10,000,000 and expenses of $7,500,000. Total assets at the beginning of the year were $5,000,000 and total assets at the end of the year were $7,000,000.
Refer to Arkansas Company. In the most recent year, what was Little Rock Division's residual income?

Accepted Answer

A)  $ 960,000 
B)  $1,380,000 
C)  $1,540,000 
D)  $1,700,000 
A)  $ 960,000 
B)  $1,380,000 
C)  $1,540,000 
D)  $1,700,000

Question 12

Perry Corporation is composed of three operating divisions. Overall, the Perry Corporation has a return on investment of 20%. Division A has a return on investment of 25%. If Perry Corporation. evaluates its managers on the basis of return on investment, how would the Division A manager and the Perry Corporation president react to a new investment that has an estimated return on investment of 23%?

Accepted Answer

A)  accept accept 
B)  accept reject 
C)  reject accept 
D)  reject reject 
A)  accept accept 
B)  accept reject 
C)  reject accept 
D)  reject reject

Question 13

Broncho Sports Enterprises The Football Division of Broncho Sports Enterprises reported the following financial data for the year:
  Refer to Broncho Sports Company. What was the target rate of return for Broncho Sports Company?

Accepted Answer

A)  4% 
B)  5% 
C)  7% 
D)  9% 
A)  4% 
B)  5% 
C)  7% 
D)  9%

Question 14

Eastern Division
The Eastern Division of Freeport Chemical Co. produced the following operating results for the previous year:
   The Eastern Division is considering a $1,000,000 investment in a new project. The Eastern Division estimates that its return on investment (for all of its operations) would be at 22% with the new investment.
Refer to Eastern Division. If the manager of the Eastern Division is evaluated on return on investment alone, will the manager invest in the new project? Explain.

Accepted Answer

The manager would not invest in the new

Question 15

On a balanced scorecard, which of the following would be most appropriate to measure customer service?

Accepted Answer

A)  Rapid time-to-market of new products 
B)  Corporate financial profits 
C)  On-time delivery 
D)  Decrease in reworked products 
A)  Rapid time-to-market of new products 
B)  Corporate financial profits 
C)  On-time delivery 
D)  Decrease in reworked products

Question 16

Houston Company Freeport Division of the Houston Company has the following statistics for its most recent operations:
  Refer to Houston Company. What is the target rate of return in Houston Company?

Accepted Answer

A)  25% 
B)  20% 
C)  15% 
D)  10% 
A)  25% 
B)  20% 
C)  15% 
D)  10%

Question 17

Tax deferral is the most desirable form of tax treatment for employee compensation elements.

Accepted Answer

A) True 
 B)False

Question 18

A division of Wheeler Corporation reported a return on investment of 20% for a recent period. If the division's asset turnover was 5, its profit margin must have been

Accepted Answer

A)  100% 
B)  4% 
C)  25% 
D)  2% 
A)  100% 
B)  4% 
C)  25% 
D)  2%

Question 19

Hourly compensation provides a definite link between performance and reward.

Accepted Answer

A) True 
 B)False

Question 20

Net cash flow could be used to measure performance in

Accepted Answer

A)  cost centers and investment centers. 
B)  revenue centers and profit centers. 
C)  revenue centers and investment centers. 
D)  profit and investment centers. 
A)  cost centers and investment centers. 
B)  revenue centers and profit centers. 
C)  revenue centers and investment centers. 
D)  profit and investment centers.

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

Residual income is used as a performance measure in

Which of the following is the throughput measure?

The number of good units or quantity of services that are produced and sold by an organization within a specified time is referred to as ____________________.

A primary purpose of a balanced scorecard is to give

Residual income is an example of a ____ performance measurement.

An organization's values statement identifies fundamental beliefs about what is important to the organization.

Return on investment is computed by dividing income by

The information below relates to costs, revenues, and assets anticipated in the Shoe Division of BVD Footwear Corporation: How would each of the following measures be affected if sales rise by $5,000 in the Shoe Division?

Broncho Sports Enterprises The Football Division of Broncho Sports Enterprises reported the following financial data for the year: Refer to Broncho Sports Company. What was the target rate of return for Broncho Sports Company?

On a balanced scorecard, which of the following would be most appropriate to measure customer service?

Houston Company Freeport Division of the Houston Company has the following statistics for its most recent operations: Refer to Houston Company. What is the target rate of return in Houston Company?

Tax deferral is the most desirable form of tax treatment for employee compensation elements.

A division of Wheeler Corporation reported a return on investment of 20% for a recent period. If the division's asset turnover was 5, its profit margin must have been

Hourly compensation provides a definite link between performance and reward.

Net cash flow could be used to measure performance in

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

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

Residual income is used as a performance measure in

Which of the following is the throughput measure?

The number of good units or quantity of services that are produced and sold by an organization within a specified time is referred to as ____________________.

A primary purpose of a balanced scorecard is to give

Residual income is an example of a ____ performance measurement.

An organization's values statement identifies fundamental beliefs about what is important to the organization.

Return on investment is computed by dividing income by

The information below relates to costs, revenues, and assets anticipated in the Shoe Division of BVD Footwear Corporation: How would each of the following measures be affected if sales rise by $5,000 in the Shoe Division?

Broncho Sports Enterprises The Football Division of Broncho Sports Enterprises reported the following financial data for the year: Refer to Broncho Sports Company. What was the target rate of return for Broncho Sports Company?

On a balanced scorecard, which of the following would be most appropriate to measure customer service?

Houston Company Freeport Division of the Houston Company has the following statistics for its most recent operations: Refer to Houston Company. What is the target rate of return in Houston Company?

Tax deferral is the most desirable form of tax treatment for employee compensation elements.

A division of Wheeler Corporation reported a return on investment of 20% for a recent period. If the division's asset turnover was 5, its profit margin must have been

Hourly compensation provides a definite link between performance and reward.

Net cash flow could be used to measure performance in

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