Question 1

What are some of the major problems associated with accrual-based accounting performance measures?

Accepted Answer

There are two major problems with accrua

Question 2

When assessing performance, one way to compensate for differences among divisions of a multinational organization would be for the parent company to

Accepted Answer

A)  use different target rates of return to compute residual incomes. 
B)  modify the return on investment calculation so that foreign currency fluctuations are removed from all financial statement figures. 
C)  classify all domestic divisions as investment centers and all foreign divisions as profit centers. 
D)  use financial performance measures for units whose records are kept in the domestic currency and non-financial measures for units whose records are kept in a foreign currency. 
A)  use different target rates of return to compute residual incomes. 
B)  modify the return on investment calculation so that foreign currency fluctuations are removed from all financial statement figures. 
C)  classify all domestic divisions as investment centers and all foreign divisions as profit centers. 
D)  use financial performance measures for units whose records are kept in the domestic currency and non-financial measures for units whose records are kept in a foreign currency.

Question 3

Broncho Sports Enterprises The Football Division of Broncho Sports Enterprises reported the following financial data for the year:
  Refer to Broncho Sports Enterprises. If expenses increased by $15,000 in the Football Division,

Accepted Answer

A)  return on investment would decrease. 
B)  residual income would increase. 
C)  the target rate of return would decrease. 
D)  asset turnover would decrease. 
A)  return on investment would decrease. 
B)  residual income would increase. 
C)  the target rate of return would decrease. 
D)  asset turnover would decrease.

Question 4

Which performance plan best promotes quality of the product or service?

Accepted Answer

A)  piece rate 
B)  health insurance 
C)  pensions 
D)  profit sharing 
A)  piece rate 
B)  health insurance 
C)  pensions 
D)  profit sharing

Question 5

Discuss pay-for-performance plans.

Accepted Answer

Employees should be encouraged by compen

Question 6

Global Electronics Company The Computer Division of Global Electronics Company had the following financial data for the year:
  Refer to Global Electronics Company. If the manager of the Computer Division is evaluated based on return on investment, how much would she be willing to pay for an investment that promises to increase net segment income by $50,000?

Accepted Answer

A)  $ 50,000 
B)  $ 333,333 
C)  $1,000,000 
D)  $ 500,000 
A)  $ 50,000 
B)  $ 333,333 
C)  $1,000,000 
D)  $ 500,000

Question 7

Which of the following statements is true about the values statement of an organization?

Accepted Answer

A)  It is used to formulate the mission statement. 
B)  It reflects the organization's culture by identifying beliefs about what is important to the organization. 
C)  It focuses on long-range plans for the organization. 
D)  The values contained in the statement must be quantifiable. 
A)  It is used to formulate the mission statement. 
B)  It reflects the organization's culture by identifying beliefs about what is important to the organization. 
C)  It focuses on long-range plans for the organization. 
D)  The values contained in the statement must be quantifiable.

Question 8

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

Question 9

Deferred compensation techniques are currently used in the American work place. What are they and how do they benefit the employer and the employee?

Accepted Answer

Deferred compensation is pay that was ea

Question 10

Non-financial performance measures (NFPMs) are better than financial measures in that NFPMs

Accepted Answer

A)  provide a better indication of customer satisfaction. 
B)  may better predict the direction of future cash flows. 
C)  directly measure how well an organization does those things that create shareholder value. 
D)  all of the above 
A)  provide a better indication of customer satisfaction. 
B)  may better predict the direction of future cash flows. 
C)  directly measure how well an organization does those things that create shareholder value. 
D)  all of the above

Question 11

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 12

Global Electronics Company The Computer Division of Global Electronics Company had the following financial data for the year:
  Refer to Global Electronics Company. What was the Computer Division's segment income?

Accepted Answer

A)  $150,000 
B)  $100,000 
C)  $250,000 
D)  $ 50,000 
A)  $150,000 
B)  $100,000 
C)  $250,000 
D)  $ 50,000

Question 13

A sub-unit of an organization is evaluated on the basis of its ROI. If this sub-unit's sales and expenses both increase by $30,000, how will the following measures be affected?

Accepted Answer

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

Question 14

The ratio of income to assets invested is referred to as ___________________________________.
or

Accepted Answer

return on

Question 15

Which of the following would be an appropriate alternative to the use of ROI in evaluating the performance of an investment center?

Accepted Answer

A)  yes yes yes 
B)  no yes no 
C)  yes no no 
D)  yes no yes 
A)  yes yes yes 
B)  no yes no 
C)  yes no no 
D)  yes no yes

Question 16

Contingent pay

Accepted Answer

A)  is always paid in stock options. 
B)  is the sole source of pay an employee receives from his/her employer. 
C)  is received in addition to the basic wage and is dependent upon performance exceeding some performance objective. 
D)  can only apply to individual performance. 
A)  is always paid in stock options. 
B)  is the sole source of pay an employee receives from his/her employer. 
C)  is received in addition to the basic wage and is dependent upon performance exceeding some performance objective. 
D)  can only apply to individual performance.

Question 17

If performance measures are perfect proxies for organizational goals,

Accepted Answer

A)  sub-optimization will be enhanced. 
B)  sub-unit managers will strive to achieve organizational goals. 
C)  sub-units can all be decentralized. 
D)  residual income will rise. 
A)  sub-optimization will be enhanced. 
B)  sub-unit managers will strive to achieve organizational goals. 
C)  sub-units can all be decentralized. 
D)  residual income will rise.

Question 18

Expatriate employees

Accepted Answer

A)  should be paid a base comparable to what he/she was earning domestically. 
B)  will be paid more than corresponding managers in their home country. 
C)  will always pay taxes in the country in which they are based. 
D)  should receive retirement benefits based on local currencies. 
A)  should be paid a base comparable to what he/she was earning domestically. 
B)  will be paid more than corresponding managers in their home country. 
C)  will always pay taxes in the country in which they are based. 
D)  should receive retirement benefits based on local currencies.

Question 19

What are five advantages that nonfinancial performance measures have over financial performance measures

Accepted Answer

Answers will vary on this. The major adv

Question 20

Economic value added (EVA) is a more appropriate performance measure when there is a large difference between the market value of invested capital and the book value of assets.

Accepted Answer

A) True 
 B)False

What are some of the major problems associated with accrual-based accounting performance measures?

When assessing performance, one way to compensate for differences among divisions of a multinational organization would be for the parent company to

Broncho Sports Enterprises The Football Division of Broncho Sports Enterprises reported the following financial data for the year: Refer to Broncho Sports Enterprises. If expenses increased by $15,000 in the Football Division,

Which performance plan best promotes quality of the product or service?

Discuss pay-for-performance plans.

Which of the following statements is true about the values statement of an organization?

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

Deferred compensation techniques are currently used in the American work place. What are they and how do they benefit the employer and the employee?

Non-financial performance measures (NFPMs) are better than financial measures in that NFPMs

Global Electronics Company The Computer Division of Global Electronics Company had the following financial data for the year: Refer to Global Electronics Company. What was the Computer Division's segment income?

A sub-unit of an organization is evaluated on the basis of its ROI. If this sub-unit's sales and expenses both increase by $30,000, how will the following measures be affected?

The ratio of income to assets invested is referred to as ___________________________________. or

Which of the following would be an appropriate alternative to the use of ROI in evaluating the performance of an investment center?

Contingent pay

If performance measures are perfect proxies for organizational goals,

Expatriate employees

What are five advantages that nonfinancial performance measures have over financial performance measures

Economic value added (EVA) is a more appropriate performance measure when there is a large difference between the market value of invested capital and the book value of assets.

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

What are some of the major problems associated with accrual-based accounting performance measures?

When assessing performance, one way to compensate for differences among divisions of a multinational organization would be for the parent company to

Broncho Sports Enterprises The Football Division of Broncho Sports Enterprises reported the following financial data for the year: Refer to Broncho Sports Enterprises. If expenses increased by $15,000 in the Football Division,

Which performance plan best promotes quality of the product or service?

Discuss pay-for-performance plans.

Which of the following statements is true about the values statement of an organization?

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

Deferred compensation techniques are currently used in the American work place. What are they and how do they benefit the employer and the employee?

Non-financial performance measures (NFPMs) are better than financial measures in that NFPMs

Global Electronics Company The Computer Division of Global Electronics Company had the following financial data for the year: Refer to Global Electronics Company. What was the Computer Division's segment income?

A sub-unit of an organization is evaluated on the basis of its ROI. If this sub-unit's sales and expenses both increase by $30,000, how will the following measures be affected?

The ratio of income to assets invested is referred to as ___________________________________. or

Which of the following would be an appropriate alternative to the use of ROI in evaluating the performance of an investment center?

Contingent pay

If performance measures are perfect proxies for organizational goals,

Expatriate employees

What are five advantages that nonfinancial performance measures have over financial performance measures

Economic value added (EVA) is a more appropriate performance measure when there is a large difference between the market value of invested capital and the book value of assets.

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