Exam 24: Performance Evaluation and the Balanced Scorecard

The performance measurement system should provide incentives for coordinating activities of the subunits and focusing them toward the overall company objectives. This statement reflects which of the following performance measurement goals?

Huntswell Corporation has two major divisions Agricultural Products and Industrial Products. Data for the year just finished is as follows: Agriculture Division Industrial Division Sales revenue \ 140,000 \ 1,040,000 Operating income \ 16,400 \ 220,000 Average assets \ 300,000 \ 5,540,000 Target rate of return 4.0\% 4.0\% - For the Agricultural Division, how much is the residual income?

Marcia Consumer Products has several divisions, including the Education Division and the Recreation Division. Data on the two divisions are shown here: Education Division Recreation Division Current ROI 9.2\% 10.0\% Current WACC 8.0\% 8.0\% Operating income \ 110,000 \ 200,000 Effective tax rate 20.0\% 20.0\% Average total assets \ 1,200,00 \ 2,000,000 Current liabilities \ 30,000 \ 30,000 How much is the EVA for the Recreation Division?

Which of the following is NOT a potential advantage of decentralization?

Waycross Construction Company has a pipeyard operation which is run as a cost center. They are preparing a performance report for the month of March and have provided the data below: Cost Center Flexible Flexible Budget Performance Report Actual Budget Variance U/F \% variance U/F Wages \& benefits \ 81,200 \ 80,000 Office lease expense 42,060 45,000 Depreciation expense 39,600 42,000 Insurance expense 33,490 30,000 Other expense 7,120 8,000 \ 203,470 \ 205,000 - Waycross uses management by exception. On which variance will Waycross focus first?

Which of the following statements is TRUE about performance reporting?

Which of the following goals of a performance evaluation system is accomplished when the company's actual results are compared to industry standards?

If a large diversified company has many different divisions, each competing for capital expenditure funds, which of the following statements would be MOST relevant?

Based on the variances shown on responsibility performance reports, management must take corrective action on all variances, including favorable, unfavorable, controllable, and uncontrollable variances.

An investment center is responsible for new investments. Which of the following is a good example of the kind of investments for which an investment center is responsible?

Manufacturing cycle time is a measure pertaining to the balanced scorecard's:

Marcia Consumer Products has several divisions, including the Education Division and the Recreation Division. Data on the two divisions are shown here: Education Division Recreation Division Current ROI 9.2\% 10.0\% Current WACC 8.0\% 8.0\% Operating income \ 110,009 \ 200,000 Effective tax rate 20.0\% 20.0\% Average total assets \ 1,200,009 \ 2,000,000 Current liabilities \ 30,000 \ 30,000 These data show that the Recreation Division has generated returns in excess of those expected by the investors and creditors, but the Education Division has not.

In a balanced scorecard system, the key performance indicators (KPIs) are ways to measure whether the company is meeting its goals.

Bardot Company reported operating income of $16,400. Assets at the beginning of the year totaled $440,000. Assets at the end of the year totaled $450,000. How much is the ROI?

Johnson Construction Materials Company has a sales office which sells concrete culvert pipe to property developers. The sales office is a revenue center and must prepare a monthly performance report. Please view the partially completed performance report below: Revenue Center Performance Report Actual Flexible Budget Flexible Sales Volume Static Product type: Sales Revenue Variance U/F Budget Variance U/F Budget 40 inch \ 31,500 \ 30,000 \ 40,000 36 inch long \ 40,150 \ 42,000 \ 33,000 36 inch short \ 36,200 \ 33,000 \ 30,000 32 inch \ 19,000 \ 20,000 \ 28,000 -A company uses management by exception to address flexible budget variances. On which variance would the company focus first?

One part of the balanced scorecard helps management answer the question: "How can we continue to improve and create value?" Which of the four perspectives is being described here?

Which one of the following is NOT a goal of a performance evaluation system?

In a balanced scorecard system, which of the following KPIs would relate to the learning and growth perspective?

Many companies use a balanced scorecard for performance evaluation. The balanced scorecard has four business perspectives, and utilizes KPIs to evaluate performance in various areas. Which of the following KPIs would relate to the customer perspective?

Huntswell Corporation has two major divisions Agricultural Products and Industrial Products. Data for the year just finished is as follows: Agriculture Division Industrial Division Sales revenue \ 140,000 \ 1,040,000 Operating income \ 16,400 \ 220,000 Average assets \ 300,000 \ 5,540,000 Target rate of return 4.0\% 4.0\% - For the Industrial Division, how much is the asset turnover?