Exam 9: Management Control Systems and Responsibility Accounting

Cassie Jelly Company provided the following information: Net sales were $150,000, of which $90,000 was attributable to the Cherry Division. Variable costs were $80,000, of which 40% was attributable to the Grape Division Total separable discretionary costs were $32,000, of which $20,000 applied to the Cherry Division. Total separable committed costs, not regarded as controllable by segment managers, were $14,000 in the Cherry Division and $4,000 in the Grape Division. The common costs not clearly allocated to any part of the company amounted to $5,000. Required: Prepare a contribution approach income statement for the company as a whole and also for the divisions.

Some management experts have said that the only sustainable competitive advantage is the rate at which a company's managers learn.

A management control system can be designed to emphasize all of the following simultaneously except:

Critical failure factors are actions that must be done well to drive the organization towards its goal.

Managerial effort does not necessarily have to accompany goal congruence.

When preparing segment income statements, unallocated costs:

Managers on all levels are held responsible for the total segment contribution.

The shorter a product or service is in process, the more costs it consumes.

Responsibility centers usually have a single goal that the management control system monitors.

Profit centers are responsible for:

A responsibility center for controlling revenues as well as costs is called a revenue center.

The purpose of performance measures is to set direction and to motivate managers.

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

Decreasing cycle time:

A well- designed management control system ignores nonfinancial objectives and focuses on financial objectives to develop and report measures of performance.

A responsibility center whose success is measured not only by its income, but also by relating that income to its invested capital

Eye Of The Beholder Company had the following results: Rolls of film processed 350,000 Sales revenue \ 1,200,000 Direct-labor hours worked 4,600 Direct labor cost \ 47,000 If productivity is computed using a physical measure, productivity is:

Describe a balanced scorecard, explain its advantages, and elaborate on key performance indicators.

Exists when individuals and groups aim at the same organizational goals

A measure of outputs divided by inputs