Question 1

The practice of comparing a company's achievements against the best practices in the industry is known as goal congruence.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following internal business perspective key performance indicators (KPIs)is commonly used to assess the innovation process?

Accepted Answer

A) number of new products developed 
B) number of warranty claims 
C) employee turnover rate 
D) rate of on-time deliveries 
A) number of new products developed 
B) number of warranty claims 
C) employee turnover rate 
D) rate of on-time deliveries

Question 3

The performance measurement system should provide incentives to segment managers for coordinating the activities of the subunits and focusing them toward the overall company objectives.Which of the following performance measurement goals has been described by this statement?

Accepted Answer

A) motivating segment managers 
B) promoting goal congruence 
C) providing feedback 
D) benchmarking 
A) motivating segment managers 
B) promoting goal congruence 
C) providing feedback 
D) benchmarking

Question 4

The primary objective in setting transfer prices is to achieve goal congruence by selecting a price that will maximize the overall company profits.

Accepted Answer

A) True 
 B)False

Question 5

Communicating the expectations of top management to segment managers improves goal congruence.

Accepted Answer

A) True 
 B)False

Question 6

Huang 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 the flexible budget variance for sales revenue?

Accepted Answer

A) 1.7 % F 
B) 1.7 % U 
C) 3.4 % U 
D) 3.4 % F 
A) 1.7 % F 
B) 1.7 % U 
C) 3.4 % U 
D) 3.4 % F

Question 7

The goal of the balanced scorecard is to ________.

Accepted Answer

A) maximize profits 
B) maximize operational efficiency 
C) develop a set of organizational performance measures 
D) increase the market share and maximize shareholders' wealth 
A) maximize profits 
B) maximize operational efficiency 
C) develop a set of organizational performance measures 
D) increase the market share and maximize shareholders' wealth

Question 8

A company may prefer to use residual income over return on investment for performance evaluation because ________.

Accepted Answer

A) residual income is a ratio but return on investment is an absolute figure 
B) residual income is more likely to lead to goal congruence than return on investment 
C) residual income is easier to calculate than return on investment 
D) residual income considers three elements but return on investment considers only two elements 
A) residual income is a ratio but return on investment is an absolute figure 
B) residual income is more likely to lead to goal congruence than return on investment 
C) residual income is easier to calculate than return on investment 
D) residual income considers three elements but return on investment considers only two elements

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Huntswell Corporation has two major divisions: Agricultural Products and Industrial Products.It provides the following information for the year 2014.   Calculate the profit margin for the Industrial Division of the company.

Accepted Answer

A) 10.5% 
B) 11.1% 
C) 21.0% 
D) 11.7% 
A) 10.5% 
B) 11.1% 
C) 21.0% 
D) 11.7%

Question 11

In a decentralized company,all the planning and controlling decisions are made by top management.

Accepted Answer

A) True 
 B)False

Question 12

A lag indicator is a performance measure that forecasts future performance.

Accepted Answer

A) True 
 B)False

Question 13

Cost center responsibility reports typically focus on the flexible budget variance.

Accepted Answer

A) True 
 B)False

Question 14

Responsibility reports for a profit center include ________.

Accepted Answer

A) revenues only 
B) invested capital 
C) both revenues and costs 
D) returns on investments 
A) revenues only 
B) invested capital 
C) both revenues and costs 
D) returns on investments

Question 15

Managers of investment centers are responsible not only for generating profits but also to ensure the efficient use of assets of the investment centers.

Accepted Answer

A) True 
 B)False

Question 16

Kurtz Logistics provides the following information:   
-What is the company's profit margin ratio?

Accepted Answer

A) 10.2% 
B) 11.5% 
C) 20.3% 
D) 25.4% 
A) 10.2% 
B) 11.5% 
C) 20.3% 
D) 25.4%

Question 17

The transfer price should be an amount between the market price and the variable cost.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) financial perspective of a balanced scorecard 
B) learning and growth perspective of a balanced scorecard 
C) internal business perspective of a balanced scorecard 
D) customer perspective of a balanced scorecard 
A) financial perspective of a balanced scorecard 
B) learning and growth perspective of a balanced scorecard 
C) internal business perspective of a balanced scorecard 
D) customer perspective of a balanced scorecard

Question 19

A company in which the major planning and controlling decisions are made by top management is considered as a centralized company

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 24: Responsibility Accounting and Performance Evaluation

The practice of comparing a company's achievements against the best practices in the industry is known as goal congruence.

Which of the following internal business perspective key performance indicators (KPIs)is commonly used to assess the innovation process?

The performance measurement system should provide incentives to segment managers for coordinating the activities of the subunits and focusing them toward the overall company objectives.Which of the following performance measurement goals has been described by this statement?

The primary objective in setting transfer prices is to achieve goal congruence by selecting a price that will maximize the overall company profits.

Communicating the expectations of top management to segment managers improves goal congruence.

Huang 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 the flexible budget variance for sales revenue?

The goal of the balanced scorecard is to ________.

A company may prefer to use residual income over return on investment for performance evaluation because ________.

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

Huntswell Corporation has two major divisions: Agricultural Products and Industrial Products.It provides the following information for the year 2014. Calculate the profit margin for the Industrial Division of the company.

In a decentralized company,all the planning and controlling decisions are made by top management.

A lag indicator is a performance measure that forecasts future performance.

Cost center responsibility reports typically focus on the flexible budget variance.

Responsibility reports for a profit center include ________.

Managers of investment centers are responsible not only for generating profits but also to ensure the efficient use of assets of the investment centers.

Kurtz Logistics provides the following information: -What is the company's profit margin ratio?

The transfer price should be an amount between the market price and the variable cost.

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

A company in which the major planning and controlling decisions are made by top management is considered as a centralized company

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

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Internal Control and Cash

Receivables

Plant Assets, natural Resources, and Intangibles

Investments

Current Liabilities and Payroll

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

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

Accounting Information Systems

Filters