Exam 24: Responsibility Accounting and Performance Evaluation

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

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

How is the use of a balanced scorecard as a performance evaluation system helpful to companies?

Long-term investments are made by the investment center manager for the purpose of ________.

In a ________, the manager is responsible for generating revenues and controlling costs.

Decentralized companies rarely struggle to achieve goal congruence.

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

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

Express Logistics provides the following information: Operating income \ 1,500,000 Net sales \ 13,500,000 Average total assets \ 2,000,000 Management's target rate of return 25\% What is the company's return on investment? (Round your answer to two decimal places.)

Which of the following is the correct formula for calculating return on investment?

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

Nora Kelly, one of the managers of a multi-national company, is responsible for generating revenues and controlling costs in order to increase the operating income of her division. However, she is not concerned about investment-related decisions. Nora is most likely to be the manager of a(n) ________.

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

Erwin Plumbing Materials Company has a sales office that sells water pipes to construction companies. The sales office is a revenue center and prepares a monthly responsibility report. The partially completed responsibility report is provided. Revenue Center Respansibility Repart Product Type Actual Sales Revenue Flexible Budget Variance U/F Flexible Budget Sales Volume Variance U/F Static Budget 40 inch \ 31,700 \ 30,750 \ 40,800 36 inch long 40,150 42,200 33,000 36 inch short 36,200 33,100 31,000 32 inch 19,100 20,000 28,400 The company uses management by exception to address flexible budget variances. On which product type would the company first focus?

The transaction amount for one unit of goods when the transaction occurs between divisions within the same company is the ________.

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.

Noncontrollable costs are the costs that can be influenced by the decisions of a manager.

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.

In decentralized companies, performance evaluation systems provide upper management with the feedback it needs to maintain control over the entire organization.