Question 1

Which of the following is a responsibility that is common to the managers of cost,profit,and investment centers?

Accepted Answer

A) generating revenues 
B) generating profits 
C) managing the invested capital 
D) controlling costs 
A) generating revenues 
B) generating profits 
C) managing the invested capital 
D) controlling costs

Question 2

For a centralized company,the major planning and controlling decisions are made by top management.

Accepted Answer

A) True 
 B)False

Question 3

The responsibility report for a profit center would compare ________.

Accepted Answer

A) actual costs to budgeted costs 
B) actual revenues to budgeted revenues 
C) actual revenues and costs to budgeted revenues and costs 
D) actual profits to budgeted profits 
A) actual costs to budgeted costs 
B) actual revenues to budgeted revenues 
C) actual revenues and costs to budgeted revenues and costs 
D) actual profits to budgeted profits

Question 4

A cost center responsibility report ________.

Accepted Answer

A) includes depreciation expense 
B) typically focuses on the flexible budget variance 
C) is the same as a performance report 
D) shows all costs incurred by the department 
A) includes depreciation expense 
B) typically focuses on the flexible budget variance 
C) is the same as a performance report 
D) shows all costs incurred by the department

Question 5

Centralized operations are better for small companies due to the smaller scope of their operations.

Accepted Answer

A) True 
 B)False

Question 6

Mazuka,Inc.has a division that manufactures a component that sells for $150 and has a variable cost of $45.Another division of the company wants to purchase the component.Fixed cost per unit of the component is $20.What is the transfer price if the division is operating at full capacity?

Accepted Answer

A) $65 
B) $170 
C) $150 
D) $20 
A) $65 
B) $170 
C) $150 
D) $20

Question 7

Management by exception directs management's attention to important differences between the actual and the budgeted amounts.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is the correct formula for the asset turnover ratio?

Accepted Answer

A) Net sales / Average total assets 
B) Net sales / Cost of goods sold 
C) Net sales / Net assets 
D) Net profit / Net sales 
A) Net sales / Average total assets 
B) Net sales / Cost of goods sold 
C) Net sales / Net assets 
D) Net profit / Net sales

Question 9

The balanced scorecard is a performance evaluation system that requires management to consider financial measures of performance,but not nonfinancial measures.

Accepted Answer

A) True 
 B)False

Question 10

Because profit centers are only responsible for controlling costs,their performance reports include only information on actual costs versus budgeted costs.

Accepted Answer

A) True 
 B)False

Question 11

Discuss the difference between a centralized company and a decentralized company.

Accepted Answer

In a small company,the owner or top mana

Question 12

A profit center performance report includes both revenues and expenses.

Accepted Answer

A) True 
 B)False

Question 13

The level of employee satisfaction is a key performance indicator of the ________ perspective of a balanced scorecard.

Accepted Answer

A) financial 
B) learning and growth 
C) internal business 
D) customer 
A) financial 
B) learning and growth 
C) internal business 
D) customer

Question 14

Which of the following is a key performance indicator of the internal business perspective of the balanced scorecard?

Accepted Answer

A) number of units produced per hour 
B) employee turnover 
C) cash flow 
D) number of cross-trained employees 
A) number of units produced per hour 
B) employee turnover 
C) cash flow 
D) number of cross-trained employees

Question 15

Operational performance measures are nonfinancial measures that evaluate a firm's performance on the basis of effectiveness and efficiency to ensure all segments of the business are working together to achieve the company's goals.

Accepted Answer

A) True 
 B)False

Question 16

The limitations of financial performance measures ________.

Accepted Answer

A) lead management to use accelerated depreciation methods 
B) make it easy for companies to create goal congruence 
C) lead management to use the net book value of assets 
D) can be overcome by taking a broader view of performance with a balanced scorecard 
A) lead management to use accelerated depreciation methods 
B) make it easy for companies to create goal congruence 
C) lead management to use the net book value of assets 
D) can be overcome by taking a broader view of performance with a balanced scorecard

Question 17

List the two factors that the financial evaluation of investment centers must measure.

Accepted Answer

1.How much operating income th

Question 18

Explain the difference between a controllable and a noncontrollable cost.

Accepted Answer

A controllable cost is one the

Question 19

If a company allows division managers to negotiate a cost-based transfer price,it is better to use actual costs rather than standard costs.Otherwise,the selling division has no motivation to control costs.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is an advantage of decentralization?

Accepted Answer

A) Managers' motivation and retention can be increased by empowering segment managers to make decisions. 
B) Certain costs of activities may be duplicated. 
C) Customer response time is generally decreased. 
D) Top management can concentrate on decisions that relate to day-to-day operations of segments. 
A) Managers' motivation and retention can be increased by empowering segment managers to make decisions. 
B) Certain costs of activities may be duplicated. 
C) Customer response time is generally decreased. 
D) Top management can concentrate on decisions that relate to day-to-day operations of segments.

Which of the following is a responsibility that is common to the managers of cost,profit,and investment centers?

For a centralized company,the major planning and controlling decisions are made by top management.

The responsibility report for a profit center would compare ________.

A cost center responsibility report ________.

Centralized operations are better for small companies due to the smaller scope of their operations.

Mazuka,Inc.has a division that manufactures a component that sells for $150 and has a variable cost of $45.Another division of the company wants to purchase the component.Fixed cost per unit of the component is $20.What is the transfer price if the division is operating at full capacity?

Management by exception directs management's attention to important differences between the actual and the budgeted amounts.

Which of the following is the correct formula for the asset turnover ratio?

The balanced scorecard is a performance evaluation system that requires management to consider financial measures of performance,but not nonfinancial measures.

Because profit centers are only responsible for controlling costs,their performance reports include only information on actual costs versus budgeted costs.

Discuss the difference between a centralized company and a decentralized company.

A profit center performance report includes both revenues and expenses.

The level of employee satisfaction is a key performance indicator of the ________ perspective of a balanced scorecard.

Which of the following is a key performance indicator of the internal business perspective of the balanced scorecard?

Operational performance measures are nonfinancial measures that evaluate a firm's performance on the basis of effectiveness and efficiency to ensure all segments of the business are working together to achieve the company's goals.

The limitations of financial performance measures ________.

List the two factors that the financial evaluation of investment centers must measure.

Explain the difference between a controllable and a noncontrollable cost.

If a company allows division managers to negotiate a cost-based transfer price,it is better to use actual costs rather than standard costs.Otherwise,the selling division has no motivation to control costs.

Which of the following is an advantage of decentralization?

Accounting Information Systems

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost Management Systems: Activity-Based, just-In-Time, and Quality Management Systems

Cost-Volume-Profit Analysis

Variable Costing

Master Budgets

Flexible Budgets and Standard Cost Systems

Short-Term Business Decisions

Capital Investment Decisions

Filters

Exam 24: Responsibility Accounting and Performance Evaluation

Which of the following is a responsibility that is common to the managers of cost,profit,and investment centers?

For a centralized company,the major planning and controlling decisions are made by top management.

The responsibility report for a profit center would compare ________.

A cost center responsibility report ________.

Centralized operations are better for small companies due to the smaller scope of their operations.

Mazuka,Inc.has a division that manufactures a component that sells for $150 and has a variable cost of $45.Another division of the company wants to purchase the component.Fixed cost per unit of the component is $20.What is the transfer price if the division is operating at full capacity?

Management by exception directs management's attention to important differences between the actual and the budgeted amounts.

Which of the following is the correct formula for the asset turnover ratio?

The balanced scorecard is a performance evaluation system that requires management to consider financial measures of performance,but not nonfinancial measures.

Because profit centers are only responsible for controlling costs,their performance reports include only information on actual costs versus budgeted costs.

Discuss the difference between a centralized company and a decentralized company.

A profit center performance report includes both revenues and expenses.

The level of employee satisfaction is a key performance indicator of the ________ perspective of a balanced scorecard.

Which of the following is a key performance indicator of the internal business perspective of the balanced scorecard?

Operational performance measures are nonfinancial measures that evaluate a firm's performance on the basis of effectiveness and efficiency to ensure all segments of the business are working together to achieve the company's goals.

The limitations of financial performance measures ________.

List the two factors that the financial evaluation of investment centers must measure.

Explain the difference between a controllable and a noncontrollable cost.

If a company allows division managers to negotiate a cost-based transfer price,it is better to use actual costs rather than standard costs.Otherwise,the selling division has no motivation to control costs.

Which of the following is an advantage of decentralization?

Accounting Information Systems

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost Management Systems: Activity-Based, just-In-Time, and Quality Management Systems

Cost-Volume-Profit Analysis

Variable Costing

Master Budgets

Flexible Budgets and Standard Cost Systems

Short-Term Business Decisions

Capital Investment Decisions

Filters