Exam 22: Performance Management and Evaluation

Using the following information,prepare a traditional income statement and a variable costing income statement: Sales \ 4,000,000 Variable cost of goods sold 1,800,000 Variable selling expenses 900,000 Fixed selling expenses 100,000 Fixed manufacturing costs 600,000

The manager of Center D designs,produces,and sells products to external parties.The manager makes both long-term and short-term decisions.What type of responsibility center is Center D?

When calculating ROI,assets invested represent the average of the beginning and ending asset balances for a given period.

A responsibility center in which the relationship between resources and products or services produced is not well defined is known as a(n)

Complete the following calculations for the three investment centers shown (round to two decimal places): 2)For each Investment Center,identify which performance indicator is used.

Determine the October 20xx ROI (rounded to two decimal places)for an investment center with the following information: Assets at September 30,20 \ 20,000,000 Assets at October 31,20 22,000,000 Assets at October 15,20 18,595,000 $\text { Operating income for the month ended October } 31,20 \mathrm{xx} \quad 5,000,000.0$ Operating income for the month ended October 31,20xx 5,000,000.0

Awards are often used to encourage

The causal links between an organization's goals,objectives,measures,performance targets need not be apparent.

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. What is the actual total cost?

Variable costing is a method of reporting that deals only with a manager's controllable,variable costs.

Both flexible budgeting and variable costing can be utilized to evaluate cost center performance.

Variable costing is utilized to evaluate the performance of

Determine the April 20xx residual income for an investment center with the following information: Operating income for the month ended April 30, 20xx \ 14,900,000 Assets at March 31, 20xx 10,200,000 Assets at April 30, 20xx 13,150,000 Desired ROI 49\% Actual ROI 60\%

Identify the following and show the formula for calculating each: a. ROI b. RI c. EVA

What is being measured by managers is the same as the actual measures used to monitor performance.

Standard costing would most often require which type of performance evaluation?

Compute the residual income for the Hi Ho investment center as shown below. Hi Ho Subsidiary Total sales \ 20,000 Operating income \ 4,300 Beginning assets invested \ 14,000 Ending assets invested \ 16,000 Average assets invested \ ? Desired ROI 25\%