Exam 9: Management Control Systems and Responsibility Accounting

Any cost that a manager's decisions and actions can influence

A profit center can exist in nonprofit organizations.

The following information is available for Binder Inc.and its two divisions, Books and Periodicals: Company Books Periodicals as a whole Division Division Net sales \ 100,000 \ 50,000 \ 50,000 Fixed costs: Controllable by division manager 16,500 12,500 4,000 Controllable by others 8,000 5,000 3,000 Variable costs: Cost of merchandise sold 24,500 17,500 7,000 Operating expenses 16,400 10,000 6,400 Unallocated costs 1,000 _____ is the contribution controllable by the manager of the Periodicals Division.

"Managers of profit centers should be held responsible for the center's entire profit.They are responsible for profit even if they cannot control all factors affecting it." Discuss.

The following information pertains to the Lower Division of Pompeii Company: Net Sales \ 25,000 Variable costs: Cost of merchandise sold 7,200 Operating expenses 2,700 Fixed costs: Controllable by segment manager 2,400 Controllable by others 1,000 Unallocated costs 600 The contribution controllable by a segment manager is _____.

The vast majority of employees are motivated by the same thing.

The following information is available for Paperback Inc.and its two divisions, Books and Periodicals: Company Books Periodicals as a whole Division Division Net sales \ 100,000 \ 60,000 \ 40,000 Fixed costs: Controllable by division manager 16,500 12,500 4,000 Controllable by others 8,000 5,000 3,000 Variable costs: Cost of merchandise sold 24,500 17,500 7,000 Operating expenses 16,400 10,000 6,400 Unallocated costs 1,000 Unallocated costs 7,000 _____ is the contribution margin for the Books Division.

Determining controllability is rarely a problem when a company allocates service department costs to other departments.

Organizational learning may be monitored by measuring employee turnover.

Effective management control systems allow top managers to delegate _____.

The time taken to complete a product or service, or any of the components of a product or service

Increased productivity can be shown by maintaining the number of inputs but increasing the number of outputs.

_____ is are) the most basic component of a management control system.

The contribution margin is especially helpful for predicting the impact on income of long-run changes in activity volume.

_____ is an outcome of organizational learning.

_____ is are) concerned with quality control.

Good performance measures should only focus on long-term concerns.

Internal delays and lost sales are examples of opportunity costs for a company.

Rework costs are a form of _____cost.

The key to successful management control in any organization is proper training and motivation of employees, and consistent monitoring of objectives.