Question 1

The return on investment of a company is a measure of profitability and efficiency.

Accepted Answer

A) True 
 B)False

Question 2

All of the following are advantages of decentralization except

Accepted Answer

A) duplication of costs 
B) frees top management time 
C) supports use of expert knowledge 
D) improves motivation and retention 
A) duplication of costs 
B) frees top management time 
C) supports use of expert knowledge 
D) improves motivation and retention

Question 3

One part of the balanced scorecard helps management answer the question,"How do we look to investors and creditors?" Which of the four perspectives is being described with this statement?

Accepted Answer

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

Question 4

Empowering segment managers to make decisions increases managers' motivation and retention.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) hours of employee training 
B) number of warranty claims received 
C) percentage of market share 
D) return on investment 
A) hours of employee training 
B) number of warranty claims received 
C) percentage of market share 
D) return on investment

Question 6

The responsibility report for a revenue 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 7

Which of the following perspectives of the balanced scorecard focuses on the increase of company profits through increasing revenue growth and productivity?

Accepted Answer

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

Question 8

Botanica Beauty,Inc.sells cosmetic products in the United States.Which one of the following is most likely to be a revenue center for Botanica?

Accepted Answer

A) a Botanica retail store in Dallas 
B) the Botanica human resource department 
C) a Botanica kiosk at a mall for selling its products 
D) the Botanica product lines 
A) a Botanica retail store in Dallas 
B) the Botanica human resource department 
C) a Botanica kiosk at a mall for selling its products 
D) the Botanica product lines

Question 9

Safari Equipment Company has several divisions that are investment centers.Data for the Boat Division and the Trailer Division are shown here: $$\begin{array} { | l | r | r | } 
\hline & \text { Boat Division } & \text { Trailer Division } \
\hline \text { Operating income } & \$ 80,000 & \$ 50,000 \
\hline \text { Total assets at Jan. 1 } & \$ 680,000 & \$ 215,000 \
\hline \text { Total assets at Dec .31 } & \$ 780,000 & \$ 200,000 \
\hline
\end{array}$$ Which of the following statements would be the most meaningful interpretation of this data?

Accepted Answer

A) The Boat Division's performance is better than that of the Trailer Division because it has higher assets. 
B) The Boat Division uses its assets less efficiently than the Trailer Division does because it has a lower return on investment. 
C) The Boat Division shows a more efficient use of assets than the Trailer Division because it has a higher operating income. 
D) The Boat Division is financially more successful than the Trailer Division because it shows an increase in assets. 
A) The Boat Division's performance is better than that of the Trailer Division because it has higher assets. 
B) The Boat Division uses its assets less efficiently than the Trailer Division does because it has a lower return on investment. 
C) The Boat Division shows a more efficient use of assets than the Trailer Division because it has a higher operating income. 
D) The Boat Division is financially more successful than the Trailer Division because it shows an increase in assets.

Question 10

The payroll department of a manufacturing company is most likely to be a(n)________.

Accepted Answer

A) cost center 
B) revenue center 
C) investment center 
D) profit center 
A) cost center 
B) revenue center 
C) investment center 
D) profit center

Question 11

For each of the following responsibility centers,state the typical focus of the responsibility report and briefly discuss the focus.
 $$\begin{array} { | l | l | l | } 
\hline  { \begin{array} { c } 
\text { Responsibility } \
\text { Center }
\end{array} } & \begin{array} { c } 
\text { Focus of the } \
\text { ResponsibilityReport }
\end{array} & \text { Brief Discussion of the Focus } \
\hline \text { Cost } & & \
\hline \text { Revenue } & & \
\hline \text { Profit } & & \
\hline
\end{array}$$

Accepted Answer

None

Question 12

Key performance indicators (KPIs)are summary performance measures that help managers assess whether the company is achieving its goals.

Accepted Answer

A) True 
 B)False

Question 13

All costs are ultimately controllable at the upper levels of management.

Accepted Answer

A) True 
 B)False

Question 14

Ryota Products has an industrial mower division that operates as a profit center.Below is a partially completed responsibility report for the first quarter. \[\begin{array}{l}
\text { Responsibility Report }\
\begin{array} { | c | c | c | c | c | c | c | } 
\hline & \text { Actual } & \begin{array} { c } 
\text { Flexible } \
\text { Budget }
\end{array} & \begin{array} { c } 
\text { Flexible } \
\text { Budget } \
\text { Variance }
\end{array} & \text { U/F } & \begin{array} { c } 
\text { Percentage } \
\text { Variance }
\end{array} & \text { U/F } \
\hline \begin{array} { c } 
\text { Sales } \
\text { Revenue }
\end{array} & \$ 688,000 & \$ 703,000 & & & & \
\hline \begin{array} { c } 
\text { Variable } \
\text { Expenses }
\end{array} & \underline { 309,000 } & \underline { 320,000 } & & & & \
\hline \begin{array} { c } 
\text { Contribution } \
\text { Margin }
\end{array} & 379,000 & 383,000 & & & & \
\hline \begin{array} { c } 
\text { Traceable } \
\text { Fixed }
\end{array} & & & & & & \
\text { Expenses } & \underline { 371,000 } & \underline { 368,000 } & & & & \
\hline \begin{array} { c } 
\text { Division } \
\text { Margin }
\end{array} & \underline { \$ 8000 } & \underline { \$ 15,000 } & & & & \
\hline
\end{array}
\end{array}\]
Compute the percentage variance for the flexible budget variance for traceable fixed expenses.(Round your answer to two decimal places.)

Accepted Answer

A) 0.82% F 
B) 0.82% U 
C) 1.04% U 
D) 1.04% F 
A) 0.82% F 
B) 0.82% U 
C) 1.04% U 
D) 1.04% F

Question 15

Companies evaluate investment centers using the same measures as the profit centers.

Accepted Answer

A) True 
 B)False

Question 16

A cost-based transfer price considers the cost of producing the goods when determining the price.

Accepted Answer

A) True 
 B)False

Question 17

Decentralized companies rarely struggle to achieve goal congruence.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following managers is likely to have the most diverse responsibilities?

Accepted Answer

A) the manager of a cost center 
B) the manager of a profit center 
C) the manager of an investment center 
D) the manager of a revenue center 
A) the manager of a cost center 
B) the manager of a profit center 
C) the manager of an investment center 
D) the manager of a revenue center

Question 19

Companies in which owners or top executives make all of the planning,directing and controlling decisions are ________ companies.

Accepted Answer

A) centralized 
B) decentralized 
C) formalized 
D) segmented 
A) centralized 
B) decentralized 
C) formalized 
D) segmented

Question 20

The limitations of financial performance measures reinforce the importance of the balanced scorecard.

Accepted Answer

A) True 
 B)False

The return on investment of a company is a measure of profitability and efficiency.

All of the following are advantages of decentralization except

One part of the balanced scorecard helps management answer the question,"How do we look to investors and creditors?" Which of the four perspectives is being described with this statement?

Empowering segment managers to make decisions increases managers' motivation and retention.

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

The responsibility report for a revenue center would compare ________.

Which of the following perspectives of the balanced scorecard focuses on the increase of company profits through increasing revenue growth and productivity?

Botanica Beauty,Inc.sells cosmetic products in the United States.Which one of the following is most likely to be a revenue center for Botanica?

The payroll department of a manufacturing company is most likely to be a(n)________.

For each of the following responsibility centers,state the typical focus of the responsibility report and briefly discuss the focus. Responsibility Center Focus of the ResponsibilityReport Brief Discussion of the Focus Cost Revenue Profit

Key performance indicators (KPIs)are summary performance measures that help managers assess whether the company is achieving its goals.

All costs are ultimately controllable at the upper levels of management.

Companies evaluate investment centers using the same measures as the profit centers.

A cost-based transfer price considers the cost of producing the goods when determining the price.

Decentralized companies rarely struggle to achieve goal congruence.

Which of the following managers is likely to have the most diverse responsibilities?

Companies in which owners or top executives make all of the planning,directing and controlling decisions are ________ companies.

The limitations of financial performance measures reinforce the importance of the balanced scorecard.

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

The return on investment of a company is a measure of profitability and efficiency.

All of the following are advantages of decentralization except

One part of the balanced scorecard helps management answer the question,"How do we look to investors and creditors?" Which of the four perspectives is being described with this statement?

Empowering segment managers to make decisions increases managers' motivation and retention.

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

The responsibility report for a revenue center would compare ________.

Which of the following perspectives of the balanced scorecard focuses on the increase of company profits through increasing revenue growth and productivity?

Botanica Beauty,Inc.sells cosmetic products in the United States.Which one of the following is most likely to be a revenue center for Botanica?

The payroll department of a manufacturing company is most likely to be a(n)________.

For each of the following responsibility centers,state the typical focus of the responsibility report and briefly discuss the focus. Responsibility Center Focus of the ResponsibilityReport Brief Discussion of the Focus Cost Revenue Profit

Key performance indicators (KPIs)are summary performance measures that help managers assess whether the company is achieving its goals.

All costs are ultimately controllable at the upper levels of management.

Companies evaluate investment centers using the same measures as the profit centers.

A cost-based transfer price considers the cost of producing the goods when determining the price.

Decentralized companies rarely struggle to achieve goal congruence.

Which of the following managers is likely to have the most diverse responsibilities?

Companies in which owners or top executives make all of the planning,directing and controlling decisions are ________ companies.

The limitations of financial performance measures reinforce the importance of the balanced scorecard.

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