Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

The first and most basic component in a management control system is the employee's goals.

Accepted Answer

A) True 
 B)False

Question 3

Fred Corporation and Ginger Company are dance companies. Comparative data for 20X3 and 20X6 are given below. $\begin{array}{llll}&&\text { Fred Corporation }&\text {  Ginger Corporation }\
\text { Sales revenue } & 20 \times 3 & \$ 6,300,000 & \$ 4,500,000 \
& 20 \times 6 & 7,500,000 & 6,000,000 \\
\text { Number of employees } & 20 \times 3 & 3,000 & 2,250 \
& 20 \times 6 & 3,500 & 3,250
\end{array}$ Assume that each 20X3 dollar is equivalent to 1.60 of the 20X6 dollars, due to inflation. is Fred Corporation's 20X6 productivity measure in terms of revenue per employee.

Accepted Answer

A)  $1,800.00 
B)  $3,360.00 
C)  $2,100.00 
D)  $2,142.86 
A)  $1,800.00 
B)  $3,360.00 
C)  $2,100.00 
D)  $2,142.86

Question 4

Identify which of the following statements is true.

Accepted Answer

A)  Goal congruence can exist without effort. 
B)  Rewards are necessary to achieve goal congruence and managerial effort. 
C)  Managerial effort can exist without goal congruence. 
D)  All of these answers are correct. 
A)  Goal congruence can exist without effort. 
B)  Rewards are necessary to achieve goal congruence and managerial effort. 
C)  Managerial effort can exist without goal congruence. 
D)  All of these answers are correct.

Question 5

A management control system includes the techniques to gather and control information to:

Accepted Answer

A)  motivate employees 
B)  make decisions 
C)  evaluate performance 
D)  All of these answers are correct. 
A)  motivate employees 
B)  make decisions 
C)  evaluate performance 
D)  All of these answers are correct.

Question 6

External failure costs include:

Accepted Answer

A)  returns 
B)  warranty expenses 
C)  field repairs 
D)  rework 
A)  returns 
B)  warranty expenses 
C)  field repairs 
D)  rework

Question 7

A(n) is the responsibility center for which costs are accumulated.

Accepted Answer

A)  accounting center 
B)  cost center 
C)  investment center 
D)  profit center 
A)  accounting center 
B)  cost center 
C)  investment center 
D)  profit center

Question 8

is the first step in designing a management control system.

Accepted Answer

A)  Establishing organizational goals 
B)  Preparing financial statements 
C)  Distinguishing between profit centers and cost centers 
D)  Evaluating management's performance 
A)  Establishing organizational goals 
B)  Preparing financial statements 
C)  Distinguishing between profit centers and cost centers 
D)  Evaluating management's performance

Question 9

An uncontrollable cost:

Accepted Answer

A)  is influenced by a manager's decisions and actions 
B)  tells a great deal about a manager's decision- making abilities 
C)  should be ignored in evaluating the responsibility center manager's performance 
D)  is the same as a sunk cost 
A)  is influenced by a manager's decisions and actions 
B)  tells a great deal about a manager's decision- making abilities 
C)  should be ignored in evaluating the responsibility center manager's performance 
D)  is the same as a sunk cost

Question 10

Displays the financial impact of quality

Accepted Answer

Cost of qu

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

is an outcome of organizational learning.

Accepted Answer

A)  Increased customer satisfaction 
B)  Continuous process improvement 
C)  Financial strength 
D)  All of these answers are correct. 
A)  Increased customer satisfaction 
B)  Continuous process improvement 
C)  Financial strength 
D)  All of these answers are correct.

Question 13

Specific tangible actions that can be carried out and observed on a short- term basis

Accepted Answer

The answer of Specific tangible actions that can be carried...

Question 14

The following information is available for Beast Company and its two divisions, Reptiles and Mammals: $\begin{array}{l}&\text { Company as a } & \text { Reptiles } & \text { Mammal } \
&\text { whole } & \text { Division } & \text { Division }\
\text { Net sales }&\$300,000&\$170,000&\$130,000\
\text { Fixed costs: }\
\text { Controllable by }\\text { division managers } & 16,000 & 10,000 & 6,000 \
\text { Controllable by others } & 8,000 & 6,000 & 2,000
\text { Variable costs: }\\text { Cost of } & & & \
\text { merch andise sold } & 46,000 & 28,000 & 18,000 \
\text { Operating expenses } & 14,000 & 8,000 & 6,000 \
\text { Unalloc ated costs } & 4,000 & &
\end{array}$ Required:
a. Compute the contribution margin for the Reptiles Division.
b. Compute the contribution controllable by the manager of the Mammal Division.
c. Compute the contribution by segment for the Mammal Division.
d. Compute the income before income taxes for the Beast Company.

Accepted Answer

a. $170,000 - ($28,000 + $8,000) = $134,

Question 15

Material handling cost per unit volume is a measure of:

Accepted Answer

A)  customer satisfaction 
B)  organizational learning 
C)  business process improvement 
D)  financial strength 
A)  customer satisfaction 
B)  organizational learning 
C)  business process improvement 
D)  financial strength

Question 16

The second step in designing a management control system is to determine how employees will react to evaluations that use agreed- upon performance measures.

Accepted Answer

A) True 
 B)False

Question 17

Service organizations focus on increasing the productivity of labor.

Accepted Answer

A) True 
 B)False

Question 18

Examples of this are customer satisfaction and number of defective products

Accepted Answer

Nonfinanci

Question 19

Cycle time is an important cost driver.

Accepted Answer

A) True 
 B)False

Question 20

Define a responsibility center and identify the different types of centers.

Accepted Answer

A responsibility center is a set of acti

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

The first and most basic component in a management control system is the employee's goals.

Identify which of the following statements is true.

A management control system includes the techniques to gather and control information to:

External failure costs include:

A(n) is the responsibility center for which costs are accumulated.

is the first step in designing a management control system.

An uncontrollable cost:

Displays the financial impact of quality

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

is an outcome of organizational learning.

Specific tangible actions that can be carried out and observed on a short- term basis

Material handling cost per unit volume is a measure of:

The second step in designing a management control system is to determine how employees will react to evaluations that use agreed- upon performance measures.

Service organizations focus on increasing the productivity of labor.

Examples of this are customer satisfaction and number of defective products

Cycle time is an important cost driver.

Define a responsibility center and identify the different types of centers.

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

Exam 9: Management Control Systems and Responsibility Accounting

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

The first and most basic component in a management control system is the employee's goals.

Identify which of the following statements is true.

A management control system includes the techniques to gather and control information to:

External failure costs include:

A(n) is the responsibility center for which costs are accumulated.

is the first step in designing a management control system.

An uncontrollable cost:

Displays the financial impact of quality

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

is an outcome of organizational learning.

Specific tangible actions that can be carried out and observed on a short- term basis

Material handling cost per unit volume is a measure of:

The second step in designing a management control system is to determine how employees will react to evaluations that use agreed- upon performance measures.

Service organizations focus on increasing the productivity of labor.

Examples of this are customer satisfaction and number of defective products

Cycle time is an important cost driver.

Define a responsibility center and identify the different types of centers.

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