Exam 22: Performance Management and Evaluation

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?

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. Flexible Master Budget Actual Results Budget Ground coffee \ 1,350 \ 1,200 \ 1,270 Flavored syrups 2,300 2,320 3,000 Milk 850 800 950 Servers' wages 3,500 3,800 3,600 Supervisor's salary 5,000 5,000 5,000 Espresso machine repair 50 120 150

Compute the current liabilities for the Yi Yo investment center as shown below. Yi Yo Subsidiary Total sales \ 18,000 After-tax operating income \ 1,000 Total assets \ 15,000 Current liabilities \ ? Total assets - current liabilities 3,500 Cost of capital 15\% Economic value added \ ?

Dana Klammer is the manager of the Cutting Department in the Northwest Division of Steel Products.Which of the following costs is a controllable cost?

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

Most organizations use very similar performance measures in their day-to-day business operations.

Determine the February 20xx residual income for an investment center with the following information: Operating income for the month ended February 28, 20xx \ 2,900,000 Desired ROI 52\% Actual ROI 38\% Assets invested \ 18,200,000

What are some of the limitations of utilizing ROI,residual income,and EVA to measure the performance of investment centers?

What type of incentive compensation is utilized to motivate employees to achieve financial targets that increase the company's stock price?

A manager can improve EVA by

Which of the following performance measures is most concerned with long-term financial performance?

Performance reports should include

Residual income is the amount of profit left after subtracting expenses of a particular investment center.

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

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

An organization chart assists in management control.

Tying compensation incentives to performance targets decreases the likelihood that the goals of responsibility centers,managers,and the entire organization will be well coordinated.

In developing performance measures,management must consider which of the following?

What are some items that can affect an investment center's EVA calculation,and how can EVA be improved?

Why are managers more likely to achieve their objectives in both the short term and the long term when they utilize a tool such as the balanced scorecard?