Exam 18: Performance Measurement

Slimm Washington plc's operations are broken down into divisional cost centres.Head office determines investment policy for its divisions and retains central control over selling, marketing and research and development functions.Raw material and labour costs are controllable at divisional level but managerial salaries and benefits are determined at head office. The following costs are attributable to the company's W division for the year ended 31 August 20X7: What is the total of Division W's controllable costs (in £000)?

In a division that is treated as a profit centre, which one of the following calculations provides the total of controllable profit?

Which one of the following is an advantage of decentralization?

Prewitt & Webster plc organizes its activities into divisions.Head office determines investment policy and makes all capital expenditure decisions.At a divisional level managers control costs, fix selling prices, determine sales strategy and managerial salaries.Marketing, including advertising, is managed at head office. Division A incurred the following costs and earned the following revenue during the 20X2 financial year: What was the total of controllable profit for the 20X2 financial year for A division (in £000s)?

In a division that is treated as a profit centre, which one of the following should be used as the basis for assessing divisional performance?

Which one of the following is identified by Kaplan and Norton as one of the four fundamental perspectives that can be applied to any business?

Which one of the following statements about non-financial performance measures is correct?

Which one of the following statements about the use of the Balanced Scorecard in business organizations is correct?

Which one of the following statements about internal performance reporting is correct? Internal performance reports

The manager of the Q division of Halter and Trueblood plc has the authority to set selling prices for his division, and to control costs.Decisions on capital investment are made at head office. Q division can be best described as a:

Which two words are missing from the following sentence? Divisionalization can lead to a lack of ____ in the organization, where divisions compete against each other, divisional managers spend too much time and effort on internal politics, and less than optimal decisions are made. The missing words are:

Which one of the following functions is NOT carried out by a divisional profit centre?

The manager of the X division of Spooner and Fry plc is responsible for controlling costs within her division.Selling prices and sales mix strategies are determined by the centralized sales and marketing department, and capital investment decisions are made by a committee of head office managers. X division can be best described as a:

Return on Investment (ROI) is calculated using which one of the following formulae?

Which one of the following is an advantage of decentralization?