Exam 12: Fundamentals of Management Control Systems

In responsibility accounting,a center's performance is measured by those costs which are controllable.Controllable costs are best described as including (CMA adapted)

Controllable revenue is included in a performance report of a

Which of the following statements is (are)true regarding compensation? (A)Fixed compensation is generally not linked to measured performance; i.e.,it is independent of measured performance. (B)Properly designed management control systems have contingent compensation items but not fixed compensation items.

What is the allocation rate for the upcoming year assuming Boxes-2-Go uses the single-rate method and allocates common costs based on the number of calls?

When managers are held responsible for costs but the input-output relationship is not well specified,a(n)________________________ is established.

Rockford Manufacturing Corporation uses a responsibility accounting system in its operations.Which one of the following items is least likely to appear in a performance report for a manager of one of Rockford's assembly lines? (CMA adapted)

In general,profit centers are found at higher levels in an organization than investment centers.

Explain the difference between fixed compensation and contingent compensation.Give an example of each.

Internal controls include all of the following except:

An operating unit that is responsible for only costs is commonly referred to as a(n)

If DCC uses a dual-rate for allocating its costs,how much cost will be allocated to the Software Development Department,assuming the Software Development Department actually made 1,160,000 copies during the year?

Decentralized organizations can delegate authority and still maintain control and monitor managers' performance by designing appropriate management control systems.Which of the following responsibility centers would be evaluated similar to an independent business?

If DCC uses a dual-rate for allocating its costs,how much cost will be allocated to the Software Development Department,assuming the Software Development Department actually made 1,780,000 copies during the year?

Relative performance evaluations (RPE)are not designed to

If DCC uses a dual rate for allocating its costs based on usage,how much cost will be allocated to the Software Development Department?

In general,there is a direct relationship between the quality of the information provided to managers and the quality of decisions made using that information.

Which of the following elements is not part of a management control system?

A manager makes a decision that is beneficial for a specific investment center but not for the entire organization.From the organization's perspective,this decision results in

If DCC uses a dual-rate for allocating its costs,how much cost will be allocated to the Training Department,assuming the Training Department actually made 3,250,000 copies during the year?

It is possible for performance evaluation systems and/or management control systems to contribute to unethical or fraudulent behavior.