Question 1

Which of the following is FALSE concerning profit centres and cost centres?

Accepted Answer

A)  A profit centre can exist within a decentralized organization. 
B)  A cost centre can exist within a centralized organization. 
C)  A cost centre can exist within a decentralized organization. 
D)  If a profit centre exists within a centralized organization, there cannot be any cost centres in the organization. 
A)  A profit centre can exist within a decentralized organization. 
B)  A cost centre can exist within a centralized organization. 
C)  A cost centre can exist within a decentralized organization. 
D)  If a profit centre exists within a centralized organization, there cannot be any cost centres in the organization.

Question 2

Aligning subunit performance targets with company strategy would be an example of

Accepted Answer

A)  promoting goal congruence and coordination. 
B)  motivating managers. 
C)  providing feedback. 
D)  benchmarking. 
A)  promoting goal congruence and coordination. 
B)  motivating managers. 
C)  providing feedback. 
D)  benchmarking.

Question 3

The number of on-time deliveries would be an example of measuring which perspective?

Accepted Answer

A)  Financial 
B)  Customer 
C)  Internal business 
D)  Learning and growth 
A)  Financial 
B)  Customer 
C)  Internal business 
D)  Learning and growth

Question 4

Companies that decentralize split their operations into different divisions or operating units.

Accepted Answer

A) True 
 B)False

Question 5

List and describe the goals of performance evaluation systems.

Accepted Answer

1. Promoting goal congruence and coordin

Question 6

Measures of the balanced scorecard's customer perspective include all of the following EXCEPT

Accepted Answer

A)  market share. 
B)  customer satisfaction. 
C)  employee training on new products. 
D)  number of repeat customers. 
A)  market share. 
B)  customer satisfaction. 
C)  employee training on new products. 
D)  number of repeat customers.

Question 7

The purpose of the balanced scorecard is BEST described as helping an organization

Accepted Answer

A)  develop customer relations. 
B)  mobilize employee skills for continuous improvements in processing capabilities, quality, and response times. 
C)  introduce innovative products and services desired by target customers. 
D)  translate an organization's mission and strategy into a set of performance measures that help to implement the strategy. 
A)  develop customer relations. 
B)  mobilize employee skills for continuous improvements in processing capabilities, quality, and response times. 
C)  introduce innovative products and services desired by target customers. 
D)  translate an organization's mission and strategy into a set of performance measures that help to implement the strategy.

Question 8

Use the information below to answer the following question(s):
The Tandem division of the Great Adventures Cycles Company had the following results last year (in thousands).
   
Management's target rate of return is 10% and the weighted average cost of capital is 8%. Tandem's effective tax rate is 35%.
-The Tandem division of the Great Adventures Cycles Company had the following results last year (in thousands).  
 Management's target rate of return is 10% and the weighted average cost of capital is 8%. Its effective tax rate is 40%.
What is the Tandem division's Economic Value Added (EVA)?

Accepted Answer

A)  $136,000 
B)  $152,000 
C)  $280,000 
D)  $288,000 
A)  $136,000 
B)  $152,000 
C)  $280,000 
D)  $288,000

Question 9

Use the information below to answer the following question(s):
Selected financial data for the Entertainment Division of Magic Enterprises is as follows:
  
-What is the Entertainment Division's residual income?

Accepted Answer

A)  $240,000 
B)  $640,000 
C)  $864,000 
D)  $1,200,000 
A)  $240,000 
B)  $640,000 
C)  $864,000 
D)  $1,200,000

Question 10

Use the information below to answer the following question(s):
Selected financial data for the Photocopies Division of Elizabeth's Business Machines is as follows:
  
-What is the Photocopier Division's capital turnover?

Accepted Answer

A)  3.3 
B)  2.5 
C)  19.4 
D)  1.3 
A)  3.3 
B)  2.5 
C)  19.4 
D)  1.3

Question 11

List and describe five reasons why a company might choose to decentralize.

Accepted Answer

1. Frees top management's time─by delega

Question 12

Use the information below to answer the following question(s):
Selected financial data for the Entertainment Division of Magic Enterprises is as follows:
  
-What is the Entertainment Division's profit margin?

Accepted Answer

A)  11.11% 
B)  20.00% 
C)  48.00% 
D)  240.00% 
A)  11.11% 
B)  20.00% 
C)  48.00% 
D)  240.00%

Question 13

Which of the following is the name given to the approach that recognizes that both financial and operational performance measures should be considered when evaluating company performance?

Accepted Answer

A)  The financial and operational approach 
B)  The total approach 
C)  The balanced scorecard approach 
D)  The complete approach 
A)  The financial and operational approach 
B)  The total approach 
C)  The balanced scorecard approach 
D)  The complete approach

Question 14

Use the information below to answer the following question(s):
The following data relates to the Miracle Corporation and its Toy Division.
  
-What is the Toy Division's Economic Value Added (EVA)?

Accepted Answer

A)  $140,000 
B)  $196,000 
C)  $200,000 
D)  $336,000 
A)  $140,000 
B)  $196,000 
C)  $200,000 
D)  $336,000

Question 15

Comparing actual results to the results of competitors and comparing actual results to industry standards would be an example of

Accepted Answer

A)  promoting goal congruence and coordination. 
B)  motivating managers. 
C)  providing feedback. 
D)  benchmarking. 
A)  promoting goal congruence and coordination. 
B)  motivating managers. 
C)  providing feedback. 
D)  benchmarking.

Question 16

Data on three unrelated companies are given in the following table.
   
Fill in the missing information.

Accepted Answer

@#IMG-DLM& Comfy Inn computations: ^a OI ÷ S; $156,

Question 17

Use the information below to answer the following question(s):
The Tandem division of the Great Adventures Cycles Company had the following results last year (in thousands).
   
Management's target rate of return is 10% and the weighted average cost of capital is 8%. Tandem's effective tax rate is 35%.
-What is the Tandem division's Residual Income (RI)?

Accepted Answer

A)  $152,000 
B)  $280,000 
C)  $320,000 
D)  $8,000,000 
A)  $152,000 
B)  $280,000 
C)  $320,000 
D)  $8,000,000

Question 18

The following information for Alpha Company was available for the past year:
   
Management has a 25% target rate of return. Alpha Company's weighted average cost of capital is 17% and its effective tax rate is 32%.
Calculate the EVA.

Accepted Answer

EVA = (After-tax operating income) ? [(T

Question 19

Residual Income (RI) equals operating income less minimum acceptable income.

Accepted Answer

A) True 
 B)False

Question 20

Use the information below to answer the following question(s):
Selected financial data for The Plastic Lumber Company's Outdoor Furniture Division is as follows:
  
-What is The Plastic Lumber Company's Outdoor Furniture Division profit margin?

Accepted Answer

A)  9.52% 
B)  20.00% 
C)  40.00% 
D)  200.00% 
A)  9.52% 
B)  20.00% 
C)  40.00% 
D)  200.00%

Which of the following is FALSE concerning profit centres and cost centres?

Aligning subunit performance targets with company strategy would be an example of

The number of on-time deliveries would be an example of measuring which perspective?

Companies that decentralize split their operations into different divisions or operating units.

List and describe the goals of performance evaluation systems.

Measures of the balanced scorecard's customer perspective include all of the following EXCEPT

The purpose of the balanced scorecard is BEST described as helping an organization

Use the information below to answer the following question(s): Selected financial data for the Entertainment Division of Magic Enterprises is as follows: -What is the Entertainment Division's residual income?

Use the information below to answer the following question(s): Selected financial data for the Photocopies Division of Elizabeth's Business Machines is as follows: -What is the Photocopier Division's capital turnover?

List and describe five reasons why a company might choose to decentralize.

Use the information below to answer the following question(s): Selected financial data for the Entertainment Division of Magic Enterprises is as follows: -What is the Entertainment Division's profit margin?

Which of the following is the name given to the approach that recognizes that both financial and operational performance measures should be considered when evaluating company performance?

Use the information below to answer the following question(s): The following data relates to the Miracle Corporation and its Toy Division. -What is the Toy Division's Economic Value Added (EVA)?

Comparing actual results to the results of competitors and comparing actual results to industry standards would be an example of

Data on three unrelated companies are given in the following table. Fill in the missing information.

The following information for Alpha Company was available for the past year: Management has a 25% target rate of return. Alpha Company's weighted average cost of capital is 17% and its effective tax rate is 32%. Calculate the EVA.

Residual Income (RI) equals operating income less minimum acceptable income.

Use the information below to answer the following question(s): Selected financial data for The Plastic Lumber Company's Outdoor Furniture Division is as follows: -What is The Plastic Lumber Company's Outdoor Furniture Division profit margin?

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Cost Behaviour

Cost-Volume-Profit Analysis

Job Costing

Process Costing

Activity Based Costing

Short-Term Business Decisions

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

Capital Investment Decisions and the Time Value of Money

Filters

Exam 11: Performance Evaluation and the Balanced Scorecard

Which of the following is FALSE concerning profit centres and cost centres?

Aligning subunit performance targets with company strategy would be an example of

The number of on-time deliveries would be an example of measuring which perspective?

Companies that decentralize split their operations into different divisions or operating units.

List and describe the goals of performance evaluation systems.

Measures of the balanced scorecard's customer perspective include all of the following EXCEPT

The purpose of the balanced scorecard is BEST described as helping an organization

Use the information below to answer the following question(s): Selected financial data for the Entertainment Division of Magic Enterprises is as follows: -What is the Entertainment Division's residual income?

Use the information below to answer the following question(s): Selected financial data for the Photocopies Division of Elizabeth's Business Machines is as follows: -What is the Photocopier Division's capital turnover?

List and describe five reasons why a company might choose to decentralize.

Use the information below to answer the following question(s): Selected financial data for the Entertainment Division of Magic Enterprises is as follows: -What is the Entertainment Division's profit margin?

Which of the following is the name given to the approach that recognizes that both financial and operational performance measures should be considered when evaluating company performance?

Use the information below to answer the following question(s): The following data relates to the Miracle Corporation and its Toy Division. -What is the Toy Division's Economic Value Added (EVA)?

Comparing actual results to the results of competitors and comparing actual results to industry standards would be an example of

Data on three unrelated companies are given in the following table. Fill in the missing information.

The following information for Alpha Company was available for the past year: Management has a 25% target rate of return. Alpha Company's weighted average cost of capital is 17% and its effective tax rate is 32%. Calculate the EVA.

Residual Income (RI) equals operating income less minimum acceptable income.

Use the information below to answer the following question(s): Selected financial data for The Plastic Lumber Company's Outdoor Furniture Division is as follows: -What is The Plastic Lumber Company's Outdoor Furniture Division profit margin?

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Cost Behaviour

Cost-Volume-Profit Analysis

Job Costing

Process Costing

Activity Based Costing

Short-Term Business Decisions

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

Capital Investment Decisions and the Time Value of Money

Filters