Exam 10: Performance Evaluation

Duplication of costs is a disadvantage of decentralized organizations.

Decentralization allows top management to concentrate on long-term strategic planning.

A manager is only accountable for expenses in a(n)________ center.

The maintenance department at Continental Airlines is likely to be classified as a(n)

Cost center performance reports typically focus on the static budget variance.

Assume the Air Conditioning division of the General Appliance Corporation had the following results last year (in thousands). Management's target rate of return is 15% and the weighted average cost of capital is 10%. Its effective tax rate is 35%. What is the division's sales margin?

Goal congruence is a system for evaluating the performance of each responsibility center and its manager.

Sound Design sells its computer speakers for $115 per set. Its variable cost is $75 per set of speakers. Fixed costs are $80,000 per month for volumes up to 2,400 sets of speakers. Above 2,400 sets, monthly fixed costs are $115,000. What is the budgeted operating income (loss)at a sales level of 2,300 sets of speakers per month?

Izzy Division of Marine Boats Corporation had the following results last year (in thousands). Management's target rate of return is 10% and the weighted average cost of capital is 8%. What is the Izzy Division's Residual Income (RI)?

All four perspectives must always be included on each individual company's balanced scorecard.

The reservations department for a car rental chain is likely to be classified as a(n)

Customer satisfaction ratings would be an example of the

Both the static budget and the flexible budget used for performance evaluation are developed before the period of actual production.

The results of a customer survey about customer experiences with the company's services would be an example of measuring which perspective?

Selected financial data for the Photocopies Division of Elizabeth's Business Machines is as follows: What is the Photocopier Division's return on investment?

The percentage of products with schematics and detailed operating instructions available within the company's information system for use by customer service representatives would be an example of measuring which perspective?

Pizza Hut, a division of Yum! Brands, is most likely treated as a(n)

For the most recent year, Robin Company reports operating income of $650,000. Robin's sales margin is 10%, and capital turnover is 2.0. What is Robin's return on investment (ROI)?

The Top Hat Division of Blandon's Fine Menswear had the following results last year (in thousands). Management's target rate of return is 12% and the weighted average cost of capital is 9%. What is the Top Hat Division's Residual Income (RI)?

The ________ approach recognizes that both financial and operational performance measures should be considered when evaluating company performance.