Exam 24: Responsibility Accounting and Performance Evaluation

Uniox Inc.intends to increase its profits by 50% in the next financial year.Which of the following is most likely to be a lag indicator in Uniox's performance report?

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 a key performance indicator of the customer perspective in a balanced scorecard?

Which of the following four perspectives of the balanced scorecard enables the management to answer the question,"How can we continue to improve and create value?"

Residual Income (RI)considers both the division's operating income and its average total assets.In addition,it also incorporates another piece of information known as top management's target rate of return.

Moon Beverages Corporation provides the following financial information: -Calculate the residual income (RI)of Moon Corp.

Which of the following managers is likely to have the least amount of responsibilities for a company?

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

Kurtz Logistics provides the following information: - What is the company's asset turnover ratio?

Residual income is used as a key performance indicator for evaluating an investment center's financial performance.

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

In many cases,the amount of transfer price does not affect the overall company profits.

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 traceable fixed expenses?

A company that uses a balanced scorecard has established a KPI for product quality.If the actual warranty claims are higher than expected it indicates that the quality standards have been met.

The manager of a cost center is responsible for controlling costs and generating revenues of the company.

A good balanced scorecard focuses only on lead indicators,because lag indicators are not important for the scorecard.

Qvoware Inc.sells cosmetic products in the United States.Which one of the following is most likely to be a cost center for Qvoware?

WAX-D 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 component is $25.What is the minimum transfer price if the division is operating at capacity?

The responsibility report of Keith Parker,the manager of one of the divisions of an auto parts manufacturing company,includes profits as well as return on investment and residual income.Keith is most likely the manager of a(n)________.

Which of the following best describes the manager of a profit center?