Question 1

Identify which of the following statements should guide the design of management control systems.

Accepted Answer

A)  Always expect that individuals will act selflessly. 
B)  Consider both financial performance and nonfinancial performance. 
C)  Concentrate performance measures at the most critical points in the value chain. 
D)  Design incentives so that individuals who pursue their own self- interest are also achieving the organization's objectives. 
A)  Always expect that individuals will act selflessly. 
B)  Consider both financial performance and nonfinancial performance. 
C)  Concentrate performance measures at the most critical points in the value chain. 
D)  Design incentives so that individuals who pursue their own self- interest are also achieving the organization's objectives.

Question 2

Warranty costs are a form of:

Accepted Answer

A)  external failure cost 
B)  appraisal cost 
C)  internal failure cost 
D)  prevention cost 
A)  external failure cost 
B)  appraisal cost 
C)  internal failure cost 
D)  prevention cost

Question 3

Groucho Corporation and Harpo Company are movie companies. Comparative data for 20X0 and 20X1 are given below. $\begin{array}{llll}&&\text { Groucho } & \text { Harpo } \
&&\text { Corporation } & \text { Company }\
\text { Sales revenue } & 20 \times 0 & \$ 8,000,000 & \$ 4,400,000 \
& 20 \times 1 & 9,600,000 & 6,175,000 \
\text { Number of employees } & 20 \times 0 & 8,000 & 5,500 \
& 20 \times 1 & 9,000 & 6,500
\end{array}$ Assume that each 20X0 dollar is equivalent to 1.60 of the 20X1 dollars, due to inflation. is Groucho Corporation's 20X0 revenues per employee in terms of 20X1 dollars.

Accepted Answer

A)  $1,600.00 
B)  $1,083.08 
C)  $1,422.22 
D)  $1,280.00 
A)  $1,600.00 
B)  $1,083.08 
C)  $1,422.22 
D)  $1,280.00

Question 4

Why will control systems in nonprofit organizations probably never be as highly developed as are those in profit- seeking firms?

Accepted Answer

1. Organizational goals and objectives a

Question 5

Uncontrollable costs:

Accepted Answer

A)  provide evidence about a manager's performance 
B)  are influenced by a manager's decisions and actions 
C)  are also referred to as opportunity costs 
D)  should be ignored in evaluating the responsibility center manager 
A)  provide evidence about a manager's performance 
B)  are influenced by a manager's decisions and actions 
C)  are also referred to as opportunity costs 
D)  should be ignored in evaluating the responsibility center manager

Question 6

The drive for some selected goal that creates effort and action toward that goal

Accepted Answer

The answer of The drive for some selected goal that...

Question 7

Discretionary fixed costs are usually considered as uncontrollable when evaluating a segment manager.

Accepted Answer

A) True 
 B)False

Question 8

is the effort to insure that products and services perform to customer requirements.

Accepted Answer

A)  Quality control 
B)  Managerial effort 
C)  Productivity 
D)  Cycle time 
A)  Quality control 
B)  Managerial effort 
C)  Productivity 
D)  Cycle time

Question 9

A balanced scorecard for a responsibility center:

Accepted Answer

A)  may reflect only one component of organizational success 
B)  looks the same as those of other responsibility centers 
C)  includes all performance measures for the center 
D)  All of these answers are correct. 
A)  may reflect only one component of organizational success 
B)  looks the same as those of other responsibility centers 
C)  includes all performance measures for the center 
D)  All of these answers are correct.

Question 10

Nonfinancial measures include profit targets and required return on investment.

Accepted Answer

A) True 
 B)False

Question 11

Identify which of the following statements regarding responsibility centers is false.

Accepted Answer

A)  Responsibility centers are usually classified according to their financial responsibility. 
B)  Responsibility centers usually have one objective. 
C)  Management control systems monitor responsibility center objectives. 
D)  Cost centers, profit centers, and investments centers are all examples of responsibility centers. 
A)  Responsibility centers are usually classified according to their financial responsibility. 
B)  Responsibility centers usually have one objective. 
C)  Management control systems monitor responsibility center objectives. 
D)  Cost centers, profit centers, and investments centers are all examples of responsibility centers.

Question 12

is the drive for some selected goal that creates effort and action toward that goal.

Accepted Answer

A)  Goal congruence 
B)  Motivation 
C)  Managerial effort 
D)  Apathy 
A)  Goal congruence 
B)  Motivation 
C)  Managerial effort 
D)  Apathy

Question 13

Groucho Corporation and Harpo Company are movie companies. Comparative data for 20X4 and 20X5 are given below. $\begin{array}{llll}&&\text { Groucho } & \text { Harpo } \
&&\text { Corporation } & \text { Company }\
\text { Sales revenue } & 20 \times 4 & \$ 8,400,000 & \$ 4,400,000 \
& 20 \times 5 & 9,900,000 & 6,175,000 \
\text { Number of employees } & 20 \times 4 & 8,000 & 5,500 \
& 20 \times 5 & 9,000 & 6,500
\end{array}$ Assume that each 20X4 dollar is equivalent to 1.75 of the 20X5 dollars, due to inflation. is Groucho Corporation's 20X5 productivity measure in terms of revenue per employee.

Accepted Answer

A)  $1,925.00 
B)  $1,100.00 
C)  $950.00 
D)  $1,050.00 
A)  $1,925.00 
B)  $1,100.00 
C)  $950.00 
D)  $1,050.00

Question 14

Good performance measures will do what?

Accepted Answer

1. Relate to the goals of the organizati

Question 15

A management control system can become perfect.

Accepted Answer

A) True 
 B)False

Question 16

A set of machines may be a responsibility center for a production supervisor.

Accepted Answer

A) True 
 B)False

Question 17

Benjamin Corporation and Franklin Corporation are two companies in the same industry. Comparative data for 20X1 and 20X6 are given below. $\begin{array}{llll}&&\text { Benjamin } & \text { Franklin } \
&&\text { Corporation } & \text { Corporation }\
\text { Sales revenue } & 20 \times 1 & \$ 905,520 & \$ 1,090,000 \
& 20 \times 6 & 1,950,000 & 2,962,500 \
\text { Number of employees } & 20 \times 1 & 1,750 & 2,500 \
& 20 \times 6 & 2,250 & 4,375
\end{array}$ Assume that each 20X1 dollar is equivalent to 1.90 of the 20X6 dollars, due to inflation. Required:
a. Compute Benjamin Corporation's and Franklin Corporation's 20X1 and 20X6 revenue per employee in 20X6 dollars.
b. Compare Benjamin Corporation's change in productivity between 20X1 and 20X6 with that for Franklin Corporation. Do you note any problems that may require action?

Accepted Answer

a. Benjamin Corporation
20X1: ($905,520

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Characteristics or attributes that managers must achieve to drive the organization toward its goals

Accepted Answer

The answer of Characteristics or attributes that managers must achieve...

Question 20

are specific tangible achievements that can be observed on a short- term basis.

Accepted Answer

A)  Objectives 
B)  Performance measures 
C)  Key success factors 
D)  Guidelines 
A)  Objectives 
B)  Performance measures 
C)  Key success factors 
D)  Guidelines

Identify which of the following statements should guide the design of management control systems.

Warranty costs are a form of:

Why will control systems in nonprofit organizations probably never be as highly developed as are those in profit- seeking firms?

Uncontrollable costs:

The drive for some selected goal that creates effort and action toward that goal

Discretionary fixed costs are usually considered as uncontrollable when evaluating a segment manager.

is the effort to insure that products and services perform to customer requirements.

A balanced scorecard for a responsibility center:

Nonfinancial measures include profit targets and required return on investment.

Identify which of the following statements regarding responsibility centers is false.

is the drive for some selected goal that creates effort and action toward that goal.

Good performance measures will do what?

A management control system can become perfect.

A set of machines may be a responsibility center for a production supervisor.

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

Characteristics or attributes that managers must achieve to drive the organization toward its goals

are specific tangible achievements that can be observed on a short- term basis.

Managerial Accounting and the Business Organization

Introduction to Cost Behavior and Cost Volume Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information and Decision-Making: Marketing Decisions

Relevant Information and Decision-Making: Product Decisions

The Master Budget

Flexible Budget and Variance Analysis

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Job-Costing

Process-Costing Systems

Overhead Application: Variable and Absorbtion Costing

Basic Accounting Concepts, Techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

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Exam 9: Management Control Systems and Responsibility Accounting

Identify which of the following statements should guide the design of management control systems.

Warranty costs are a form of:

Why will control systems in nonprofit organizations probably never be as highly developed as are those in profit- seeking firms?

Uncontrollable costs:

The drive for some selected goal that creates effort and action toward that goal

Discretionary fixed costs are usually considered as uncontrollable when evaluating a segment manager.

is the effort to insure that products and services perform to customer requirements.

A balanced scorecard for a responsibility center:

Nonfinancial measures include profit targets and required return on investment.

Identify which of the following statements regarding responsibility centers is false.

is the drive for some selected goal that creates effort and action toward that goal.

Good performance measures will do what?

A management control system can become perfect.

A set of machines may be a responsibility center for a production supervisor.

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

Characteristics or attributes that managers must achieve to drive the organization toward its goals

are specific tangible achievements that can be observed on a short- term basis.

Managerial Accounting and the Business Organization

Introduction to Cost Behavior and Cost Volume Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information and Decision-Making: Marketing Decisions

Relevant Information and Decision-Making: Product Decisions

The Master Budget

Flexible Budget and Variance Analysis

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Job-Costing

Process-Costing Systems

Overhead Application: Variable and Absorbtion Costing

Basic Accounting Concepts, Techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Filters