Question 1

The balanced scorecard links the perspectives of an organization's stakeholders with the organization's

Accepted Answer

A)  goals and vision, performance goals, strategic plan, and financial resources. 
B)  mission and overall plan, performance measures, departmental plans, and resources. 
C)  mission and vision, performance measures, strategic plan, and resources. 
D)  mission and vision, performance goals, overall plan, and resources. 
A)  goals and vision, performance goals, strategic plan, and financial resources. 
B)  mission and overall plan, performance measures, departmental plans, and resources. 
C)  mission and vision, performance measures, strategic plan, and resources. 
D)  mission and vision, performance goals, overall plan, and resources.

Question 2

Like ROI,residual income is a performance measure displayed as a ratio.

Accepted Answer

A) True 
 B)False

Question 3

Kristen Roper oversees her company's largest and most profitable investment center.She has asked you,as her staff accountant,to compute the center's ROI,residual income,and EVA for the month of August 20xx,using the following information (rounded to two decimal places):
 $$\begin{array} {  l r } 
 \text { August 20xx operating income } & \$ 300,000 \
\text { August } 20 x x \text { sales } & 450,000 \
\text { Assets at July 31, 20xx } & 500,000 \
\text { Assets at August 31, 20xx } & 510,000 \
\text { August 20x6 income taxes } & 90,000 \
\text { Current liablities at August 31, 20xx } & 250,000 \
\text { Cost of capital } & 19 \% \
\text { Desired ROI } & 52 \%
\end{array}$$

Accepted Answer

Assets Invested = ($510,000 + $500,000)÷

Question 4

The use of quantitative tools to gauge an organization's performance in relation to a specific goal or an expected outcome is known as

Accepted Answer

A)  responsibility accounting. 
B)  an asset turnover. 
C)  a performance management and evaluation system. 
D)  a performance measurement. 
A)  responsibility accounting. 
B)  an asset turnover. 
C)  a performance management and evaluation system. 
D)  a performance measurement.

Question 5

A performance management and evaluation system is a set of procedures that account for and report on

Accepted Answer

A)  qualitative performance. 
B)  quantitative performance. 
C)  employee performance. 
D)  quantitative and qualitative performance. 
A)  qualitative performance. 
B)  quantitative performance. 
C)  employee performance. 
D)  quantitative and qualitative performance.

Question 6

How effective a performance management and evaluation system is depends on how well the goals of the entire company are coordinated rather than on how well the goals of individual responsibility centers and managers are coordinated.

Accepted Answer

A) True 
 B)False

Question 7

Managers at all levels are evaluated in terms of their ability to manage their areas of responsibility in keeping with organizational goals.

Accepted Answer

A) True 
 B)False

Question 8

An evaluation of EVA will prove more meaningful if it is compared to

Accepted Answer

A)  target EVAs. 
B)  EVAs from other investment centers. 
C)  EVAs from previous periods. 
D)  all of these choices. 
A)  target EVAs. 
B)  EVAs from other investment centers. 
C)  EVAs from previous periods. 
D)  all of these choices.

Question 9

Variable costing allows a manager to classify controllable costs as

Accepted Answer

A)  either variable or fixed. 
B)  variable only. 
C)  fixed only. 
D)  either short-term variable or long-term variable. 
A)  either variable or fixed. 
B)  variable only. 
C)  fixed only. 
D)  either short-term variable or long-term variable.

Question 10

Which of the following represents the number of sales dollars generated by each dollar invested in assets?

Accepted Answer

A)  Asset turnover 
B)  Assets invested 
C)  Profit margin 
D)  Operating income 
A)  Asset turnover 
B)  Assets invested 
C)  Profit margin 
D)  Operating income

Question 11

The manager of Center B produces a product that is not sold to an external party.What type of responsibility center is Center B?

Accepted Answer

A)  Cost center 
B)  Discretionary cost center 
C)  Profit center 
D)  Revenue center 
A)  Cost center 
B)  Discretionary cost center 
C)  Profit center 
D)  Revenue center

Question 12

Incentive awards are utilized mainly to encourage long-term performance.

Accepted Answer

A) True 
 B)False

Question 13

Calculate ROI,residual income,and EVA for each of the investment centers listed.(Round to two decimal places.)
 $$\begin{array} { l r r } 
& \text { Investment Center 1 } & \text { Investment Center 2 } \
\text { Operating income } & \$ 50,000 & \$ 7,000 \
\text { Assets invested } & 125,000 & 180,000 \
\text { Income taxes } & 15,000 & 21,000 \
\text { Cost of capital in dollars } & 13,000 & 25,000 \
\text { Desired ROI } & 56 \% & 48 \%
\end{array}$$

Accepted Answer

\[\begin{array} { l l } 
\text { Investm

Question 14

When developing performance measures,management must consider a number of different issues besides what to measure and how to measure.

Accepted Answer

A) True 
 B)False

Question 15

Use the following performance report for a cost center of the Dry Cat Food Division for the month ended December 31 to answer the question below.   The flexible budget is based on how many units produced?

Accepted Answer

A)  0 units 
B)  30 units 
C)  70 units 
D)  100 units 
A)  0 units 
B)  30 units 
C)  70 units 
D)  100 units

Question 16

Identify and describe the five different responsibility centers,and provide one example of each.

Accepted Answer

Cost Center: A responsibility center who

Question 17

The way in which the performance of a cost center is evaluated is similar to

Accepted Answer

A)  job order costing. 
B)  standard costing. 
C)  process costing. 
D)  none of these choices. 
A)  job order costing. 
B)  standard costing. 
C)  process costing. 
D)  none of these choices.

Question 18

Performance reports should include

Accepted Answer

A)  controllable costs and revenues for a specific responsibility center. 
B)  all costs, revenues, and resources for a specific responsibility center. 
C)  controllable costs for a specific responsibility center. 
D)  controllable costs, revenues, and resources for a specific responsibility center. 
A)  controllable costs and revenues for a specific responsibility center. 
B)  all costs, revenues, and resources for a specific responsibility center. 
C)  controllable costs for a specific responsibility center. 
D)  controllable costs, revenues, and resources for a specific responsibility center.

Question 19

A responsibility accounting system ensures that

Accepted Answer

A)  generally accepted accounting principles reporting requirements are met. 
B)  managers will not be held responsible for items they cannot change. 
C)  99 percent of businesses utilizing such a system will be profitable. 
D)  easy correlations between revenues and costs can be drawn. 
A)  generally accepted accounting principles reporting requirements are met. 
B)  managers will not be held responsible for items they cannot change. 
C)  99 percent of businesses utilizing such a system will be profitable. 
D)  easy correlations between revenues and costs can be drawn.

Question 20

The CEO of Buckstars is interested in reviewing the May 20xx performance report for Cost Center 7-11.Prepare a brief performance report for the CEO utilizing the following information for Cost Center 7-11.Line items should be broken out between direct materials,direct labor,variable overhead,and fixed overhead.
 $\begin{array}{lrrr}
&& \text { Flexible } & \text { Master Budget } \
&\text { Actual Results } & \text { Budget } &\
\text { Ground coffee } & \$ 1,350 & \$ 1,200 & \$ 1,270 \
\text { Flavored syrups } & 2,300 & 2,320 & 3,000 \
\text { Milk } & 850 & 800 & 950 \
\text { Servers' wages } & 3,500 & 3,800 & 3,600 \
\text { Supervisor's salary } & 5,000 & 5,000 & 5,000 \
\text { Espresso machine repair } & 50 & 120 & 150
\end{array}$

Accepted Answer

The answer of The CEO of Buckstars is interested in...

Exam 22: Performance Management and Evaluation

The balanced scorecard links the perspectives of an organization's stakeholders with the organization's

Like ROI,residual income is a performance measure displayed as a ratio.

The use of quantitative tools to gauge an organization's performance in relation to a specific goal or an expected outcome is known as

A performance management and evaluation system is a set of procedures that account for and report on

How effective a performance management and evaluation system is depends on how well the goals of the entire company are coordinated rather than on how well the goals of individual responsibility centers and managers are coordinated.

Managers at all levels are evaluated in terms of their ability to manage their areas of responsibility in keeping with organizational goals.

An evaluation of EVA will prove more meaningful if it is compared to

Variable costing allows a manager to classify controllable costs as

Which of the following represents the number of sales dollars generated by each dollar invested in assets?

The manager of Center B produces a product that is not sold to an external party.What type of responsibility center is Center B?

Incentive awards are utilized mainly to encourage long-term performance.

When developing performance measures,management must consider a number of different issues besides what to measure and how to measure.

Use the following performance report for a cost center of the Dry Cat Food Division for the month ended December 31 to answer the question below. The flexible budget is based on how many units produced?

Identify and describe the five different responsibility centers,and provide one example of each.

The way in which the performance of a cost center is evaluated is similar to

Performance reports should include

A responsibility accounting system ensures that

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Contributed Capital

Investments

The Corporate Income Statement and the Statement of Stockholders Equity

The Statement of Cash Flows

The Changing Business Environment - a Managers Perspective

Cost Concepts and Cost Allocation

Costing Systems- Job Order Costing

Costing Systems- Process Costing

Value-Based Systems- Abm and Lean

Cost Behavior Analysis

The Budgeting Process

Standard Costing and Variance Analysis

Short Run Decision Analysis

Capital Investment Analysis

Pricing Decisions,incltarget Costing and Transfer Pricing

Quality Management and Measurement

Financial Analysis of Performance

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