Exam 24: Performance Evaluation and the Balanced Scorecard

Huntswell Corporation has two major divisionsAgricultural Products and Industrial Products. Data for the year just finished is as follows: For the Industrial Division, how much is the asset turnover?

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 complete the performance report using the format and the data below: Revenue Center Performance Report

Employee skills, information system capabilities, and the company's "climate for action" are key factors related to which of the four perspectives of a balanced scorecard?

Which of the following statements BEST describes management by exception?

Which of the following statements reflects the use of benchmarking in a performance evaluation system?

When a small company grows to a large size, it may decide to decentralize because it is difficult for one owner (or manager)to manage an entire, large business.

ROI is used to compare various units of a company to other companies in the industry, but is NOT used to compare various divisions within the same company because that would hinder creative management and competitiveness within the company.

The performance measurement system lets upper management know whether the subunits are achieving their goals and targets or not. This statement reflects which of the following performance measurement goals?

Which of the following statements MOST accurately explains a positive residual income?

If a manager's performance is evaluated solely on the ability to control costs, he or she may sacrifice quality for savings, thus endangering customer satisfaction.

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?

Tavares Manufactured Homes Company has a sales division which submits a monthly performance report as a revenue center. A partially completed performance report appears below:

Recreation Equipment Company has several divisions that are investment centers. Data for the Boat Division and the Trailer Division are shown here: With regard to using assets efficiently, the Boat Division has the higher ROI because it has the highest operating income.

The formula for RI (residual income)is:

Financial performance metrics are considered to be a lead indicator, providing signs of future performance.

Zhongfang Consumer Products has a small car division that operates as a profit center. Below is a partially completed performance report for the first quarter. How much is the percentage variance for traceable fixed expenses?

Asset turnover is defined as the average total assets divided by the sales revenue.

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. It has provided the data below. How much is the flexible budget variance for the 32 inch pipe?

Zhongfang Consumer Products has a small car division that operates as a profit center. Below is a partially completed performance report for the first quarter. How much is the percentage variance for divisional profit margin?

Companies that are centralized split their operations into different divisions or operating units and top management delegates decision-making to the division/unit managers.