Exam 22: Performance Management and Evaluation

Compute the profit margin (rounded to nearest percent)for the Tim Tom investment center as shown below. Tim Tom Subsidiary Total sales \ 1,600 Operating income \ 140 Average assets invested \ 900 Profit margin ? Asset turnover ? ROI ?

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

A good example of a profit center would be

A report for a responsibility center includes costs and revenues that are both controllable and uncontrollable by a manager.

Responsibility accounting is more concerned with performance evaluation than performance management.

The effectiveness of a performance management and evaluation system depends on how well it coordinates the goals of

Compute the return on investment (rounded to nearest percent)for the Tim Tom investment center as shown below. Tim Tom Subsidiary Total sales \ 1,600 Operating income \ 180 Average assets invested \ 900 Profit margin ? Asset turnover ? ROI ?

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

For purposes of computing EVA,the minimum desired rate or return on an investment is known as

The alignment of an organization's strategy with all the perspectives of the balanced scorecard results in performance objectives that benefit all stakeholders.

As the staff accountant for NYC Investment Center #1,compute the center's EVA,using the following information: Pretax Operating income 900,000 Income taxes 270,000 Total assets 1,500,000 Total liabilities 1,000,000 Long-term liabilities 100,000 Cost of capital 55\%

As the staff accountant for Investment Centers Beta and Gamma,compute the residual income for each investment center,using the following information: Beta Gamma Operating income \ 850,000 \ 1,000,000 Actual ROI 28\% 49\% Desired ROI 32\% 35\% Assets invested \ 585,000 \ 750,000

A variable costing income statement is essentially the same as a traditional income statement.

Awards are often used to encourage

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

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

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