Exam 24: Responsibility Accounting and Performance Evaluation

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

The primary objective in setting transfer prices is to ________.

Mathews Construction Materials Company has a sales office that sells concrete culvert pipes to property developers.The sales office is a revenue center and prepares a monthly responsibility report.The following information is provided.Complete the responsibility report. Mathews Construction Materials Company Revenue Center Responsibility Report Flexible Actual Sales Budget Flexible Sales Volume Product Type Revenue Variance Budget Variance Static Budget 40 inch \ 31,700 \ 30,500 \ 40,800 36 inch 40,150 42,200 33,000 32 inch Total

Investment center managers are responsible for generating profits and making use of the investment center's assets.

The return on investment of a company can be improved by either increasing average total assets or decreasing operating income.

In addition to considering both the division's operating income and its average total assets,residual income incorporates top management's target rate of return.

Which of the following is the correct formula for calculating residual income?

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

Operating income alone does not indicate how efficiently a segment is using its assets.

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

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

Huntswell Corporation has two major divisions: Agricultural Products and Industrial Products.It provides the following information for the year. Agriculture Division Industrial Division Net sales \ 140,000 \ 1,250,000 Operating income \ 17,600 \ 218,000 Average assets \ 340,000 \ 5,500,000 Calculate the profit margin for the Industrial Division of the company.(Round your answer to two decimal places. )

The balanced scorecard focuses only on lead indicators,because lag indicators are not important for performance evaluation.

The balanced scorecard system requires management to consider ________.

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

Which of the following is not an advantage of decentralization?

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

Which of the following statements is true of performance reporting?

To create goal congruence,some firms prefer calculating ROI based on the gross book value of asset.

Regardless of the type of responsibility center,responsibility reports should focus on information,not blame.