Question 1

A(n)________ cost is any cost that management cannot reasonably affect within a given time span.

Accepted Answer

A)  controllable 
B)  quality 
C)  uncontrollable 
D)  opportunity 
A)  controllable 
B)  quality 
C)  uncontrollable 
D)  opportunity C

Question 2

The components of a successful organization are organizational learning,business process improvement,________ and ________.

Accepted Answer

A)  profitability; organizational culture 
B)  profitability; customer satisfaction 
C)  customer satisfaction; financial strength 
D)  goal congruence; managerial effort 
A)  profitability; organizational culture 
B)  profitability; customer satisfaction 
C)  customer satisfaction; financial strength 
D)  goal congruence; managerial effort C

Question 3

The following information pertains to the East Division of Saturn Company:
$\begin{array} { l  }
 \text { NET SALES}&\$21,000 \
\end{array}$

Variable costs:
$\begin{array} { l  }
 \text { Cost of merchandise sold}& 10,300\ \text {Operating expenses }&3,700 \
\end{array}$

Fixed costs:
$\begin{array} { l  }
 \text {Controllable by segment manager }& 2,400\
 \text { Controllable by others}&1,000 \
 \text { unallocated costs}&600 \
\end{array}$

The contribution margin of the East Division is ________.

Accepted Answer

A)  $7,000 
B)  $7,700 
C)  $8,000 
D)  $10,700 
A)  $7,000 
B)  $7,700 
C)  $8,000 
D)  $10,700 A

Question 4

A ________ refers to the set of activities assigned to a manager or a group of managers or other employees.

Accepted Answer

A)  internal control system 
B)  management control system 
C)  responsibility center 
D)  quality control report 
A)  internal control system 
B)  management control system 
C)  responsibility center 
D)  quality control report

Question 5

The following information is available for Pet Store Company and its two divisions,Pet Supplies and Training.
 $\begin{array}{lll}
&\text { Whole } & \text { Pet Supplies } & \text { Training } \
&\text { Company } & \text { Division } & \text { Division }\
\text { Net sales }&\$170,000&\$70,000&\$100,000
\end{array}$ 
Fixed costs:
 $\begin{array}{lll}
\text { Controllable by division managers }&16,000 & 10,000 & 6,000 \
\text { Controllable by others }&8,000 & 6,000 & 2,000
\end{array}$ 
Variable costs:
 $\begin{array}{llll}
\text { Cost of merchandise sold } & 46,000 & 28,000 & 18,000 \
\text { Operating expenses } & 14,000 & 8,000 & 6,000 \
\text { Unallocated costs } & 14,000 &
\end{array}$ 
Required: 
A) Compute the contribution margin for the Pet Supplies Division.
B) Compute the contribution controllable by the manager of the Training Division.
C) Compute the contribution by segment for the Training Division.
D) Compute the income before taxes for the whole company.

Accepted Answer

A)$70,000 - $28,000 - $8,000 = $34,000
B

Question 6

Assume you are preparing income statements for different segments.Which of the following is NOT a fixed cost controllable by a segment manager?

Accepted Answer

A)  salespersons' salaries for segment 
B)  advertising costs in local paper to promote segment 
C)  training costs for new employees at segment 
D)  segment manager's salary 
A)  salespersons' salaries for segment 
B)  advertising costs in local paper to promote segment 
C)  training costs for new employees at segment 
D)  segment manager's salary

Question 7

________ costs involve efforts to improve product design for more efficient production processes.

Accepted Answer

A)  Prevention 
B)  Appraisal 
C)  Internal failure 
D)  External failure 
A)  Prevention 
B)  Appraisal 
C)  Internal failure 
D)  External failure

Question 8

Internal delays and lost sales are examples of opportunity costs for a firm.

Accepted Answer

A) True 
 B)False

Question 9

Financial performance of a manager is measured by ________.Financial performance of a segment is measured by ________.

Accepted Answer

A)  contribution by segment; contribution margin 
B)  contribution margin; net income of segment 
C)  contribution controllable by segment manager; contribution by segment 
D)  contribution margin; contribution controllable by segment manager 
A)  contribution by segment; contribution margin 
B)  contribution margin; net income of segment 
C)  contribution controllable by segment manager; contribution by segment 
D)  contribution margin; contribution controllable by segment manager

Question 10

The first and most basic component in a management control system is the employee's goals.

Accepted Answer

A) True 
 B)False

Question 11

Effective performance measures have all the following characteristics EXCEPT ________.

Accepted Answer

A)  used consistently and regularly in evaluating and rewarding employees 
B)  readily understood by employees 
C)  balance long-term and short-term concerns 
D)  unaffected by the actions of managers 
A)  used consistently and regularly in evaluating and rewarding employees 
B)  readily understood by employees 
C)  balance long-term and short-term concerns 
D)  unaffected by the actions of managers

Question 12

The following information pertains to the West Division of Burger Company:
$\begin{array} { l  }
 \text {net sales }& \$6,000\
\end{array}$

Variable costs:
$\begin{array} { l  }
 \text { Cost of merchandise sold}&1,000 \
 \text {Operating expenses }&450 \
\end{array}$

Fixed costs:
$\begin{array} { l  }
 \text { Controllable by segment mananger}&1,600 \
 \text {Controllable by others }&1,250 \
 \text {unallocated costs }&750 \
\end{array}$

The contribution margin of the West Division is ________.

Accepted Answer

A)  $2,750 
B)  $3,650 
C)  $4,350 
D)  $4,550 
A)  $2,750 
B)  $3,650 
C)  $4,350 
D)  $4,550

Question 13

Elements of the planning and control process for a management control system do NOT include ________.

Accepted Answer

A)  measure, monitor and report 
B)  plan and execute 
C)  evaluate and reward 
D)  feedback and control 
A)  measure, monitor and report 
B)  plan and execute 
C)  evaluate and reward 
D)  feedback and control

Question 14

Managers in profit centers are responsible for controlling ________ and ________.

Accepted Answer

A)  costs; invested capital 
B)  revenues; invested capital 
C)  revenues; costs 
D)  expenses; invested capital 
A)  costs; invested capital 
B)  revenues; invested capital 
C)  revenues; costs 
D)  expenses; invested capital

Question 15

The following information is available for Paperback Books Inc.and its two divisions,Books and Periodicals:
$$\begin{array} { l l l } 
\text { Whole } & \text { Eooks } & \text { Periodicals } \
\text { Company } & \text { Division } & \text { Division }
\end{array}$$
Division
$\begin{array} { l  }
 \text {net sales }&\$100,000&\$60,000&\$40,000 \
\end{array}$

Fixed Costs Controllable
$\begin{array} { l  }
 \text {By Division Manager }&26,50&22,500&4,000\
\end{array}$

Fixed Costs Not Controlled
$\begin{array} { l  }
 \text {By Division Manager }&18,000&15,000&3,000\
\end{array}$

Variable Costs:
$$\begin{array} { l l l l } 
\text { Cost of Merchandise Sold } & 24,500 & 17,500 & 7,000 \
\text { Operating Expenses } & 26,400 & 20,000 & 6,400 \
\text { Unallocated Costs } & 7,000 & &
\end{array}$$
What is the contribution margin for the Books Division?

Accepted Answer

A)  $15,000 
B)  $22,500 
C)  $32,500 
D)  $42,500 
A)  $15,000 
B)  $22,500 
C)  $32,500 
D)  $42,500

Question 16

Organizational learning can NOT be monitored by ________.

Accepted Answer

A)  employee training time 
B)  employee turnover 
C)  employee satisfaction scores on internal surveys 
D)  percentage of employees with children 
A)  employee training time 
B)  employee turnover 
C)  employee satisfaction scores on internal surveys 
D)  percentage of employees with children

Question 17

The following information is available for Half Price Books Inc.and its two divisions,Books and Periodicals:
$\begin{array}{lll}
&\text { Whole } & \text { Books } & \text { Periodicals } \
&\text { Company } & \text { Division } & \text { Division }\
\text { Net Sales }&\$00,000&\$50,000&\$50,000
\end{array}$
Fixed Costs Controllable
$\begin{array} { l  }
 \text {By Division Manager }&26,500&22,500&4,000\
\end{array}$

Fixed Costs Not Controlled
$\begin{array} { l  }
 \text {By Division Manager }&18,000&15,000&3,000\
\end{array}$

Variable Costs:
$$\begin{array} { l l l l } 
\text { Cost of Merchandise Sold } & 24,500 & 17,500 & 7,000 \
\text { Operating Expenses } & 17,400 & 10,000 & 7,400 \
\text { Unallocated Costs } & 4,000 & &
\end{array}$$
What is the contribution margin for the Periodicals Division?

Accepted Answer

A)  $29,600 
B)  $32,600 
C)  $35,600 
D)  $43,000 
A)  $29,600 
B)  $32,600 
C)  $35,600 
D)  $43,000

Question 18

The term "cost center" may be used to describe responsibility centers that are assigned responsibility for capital investment.

Accepted Answer

A) True 
 B)False

Question 19

The following information is available for Discounted Supplies Inc.and its two divisions,Durable Goods and Nondurable Goods.
$$\begin{array} { l l l } 
&\text { Whole } & \text { Durable } & \text { Nondurable } \
&\text { Company } & \text { Goods } & \text { Goods } \
\hline \text { Net sales }&\$ 100,000 & \$ 60,000 & \$ 40,000
\end{array}$$
Fixed costs controllable by
$\begin{array}{lll}
\text { Division Manager }&16,500 & 12,500 & 4,000 \
\text { Fixed costs controlled by others }&8,000 & 5,000 & 3,000
\end{array}$
Variable costs:
$\begin{array} { l  }
 \text { Cost of merchandise sold}&24,500&17,500&7,000 \
 \text {Operating expenses }&16,400&10,000&6,400 \
 \text {Unallocated costs }& 1,000\
\end{array}$

What is the income before taxes for the company as a whole?

Accepted Answer

A)  $15,000 
B)  $29,600 
C)  $33,600 
D)  $34,600 
A)  $15,000 
B)  $29,600 
C)  $33,600 
D)  $34,600

Question 20

Managerial effort does not necessarily have to accompany goal congruence.

Accepted Answer

A) True 
 B)False

A(n)________ cost is any cost that management cannot reasonably affect within a given time span.

The components of a successful organization are organizational learning,business process improvement, and .

A ________ refers to the set of activities assigned to a manager or a group of managers or other employees.

Assume you are preparing income statements for different segments.Which of the following is NOT a fixed cost controllable by a segment manager?

________ costs involve efforts to improve product design for more efficient production processes.

Internal delays and lost sales are examples of opportunity costs for a firm.

Financial performance of a manager is measured by .Financial performance of a segment is measured by .

The first and most basic component in a management control system is the employee's goals.

Effective performance measures have all the following characteristics EXCEPT ________.

Elements of the planning and control process for a management control system do NOT include ________.

Managers in profit centers are responsible for controlling and .

Organizational learning can NOT be monitored by ________.

The term "cost center" may be used to describe responsibility centers that are assigned responsibility for capital investment.

Managerial effort does not necessarily have to accompany goal congruence.

Managerial Accounting,the Business Organization,and Professional Ethics

Introduction to Cost Behavior and Cost Volume Profit Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus on Pricing Decisions

Relevant Information for Decision Making With a Focus on Operational Decisions

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

Filters

Exam 9: Management Control Systems and Responsibility Accounting

A(n)________ cost is any cost that management cannot reasonably affect within a given time span.

The components of a successful organization are organizational learning,business process improvement,________ and ________.

A ________ refers to the set of activities assigned to a manager or a group of managers or other employees.

Assume you are preparing income statements for different segments.Which of the following is NOT a fixed cost controllable by a segment manager?

________ costs involve efforts to improve product design for more efficient production processes.

Internal delays and lost sales are examples of opportunity costs for a firm.

Financial performance of a manager is measured by ________.Financial performance of a segment is measured by ________.

The first and most basic component in a management control system is the employee's goals.

Effective performance measures have all the following characteristics EXCEPT ________.

Elements of the planning and control process for a management control system do NOT include ________.

Managers in profit centers are responsible for controlling ________ and ________.

Organizational learning can NOT be monitored by ________.

The term "cost center" may be used to describe responsibility centers that are assigned responsibility for capital investment.

Managerial effort does not necessarily have to accompany goal congruence.

Managerial Accounting,the Business Organization,and Professional Ethics

Introduction to Cost Behavior and Cost Volume Profit Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus on Pricing Decisions

Relevant Information for Decision Making With a Focus on Operational Decisions

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

Filters

The components of a successful organization are organizational learning,business process improvement, and .

Financial performance of a manager is measured by .Financial performance of a segment is measured by .

Managers in profit centers are responsible for controlling and .