Question 1

An advantage of decentralization is that it

Accepted Answer

A)  creates greater responsiveness to local needs. 
B)  focuses managers' attention on the organization as a whole. 
C)  reduces the cost of gathering information. 
D)  leads to decision making consistent with company goals. 
A)  creates greater responsiveness to local needs. 
B)  focuses managers' attention on the organization as a whole. 
C)  reduces the cost of gathering information. 
D)  leads to decision making consistent with company goals.

Question 2

The manager of a local Walmart would be in charge of a(n)

Accepted Answer

A)  cost centre. 
B)  investment centre. 
C)  profit centre. 
D)  revenue centre. 
A)  cost centre. 
B)  investment centre. 
C)  profit centre. 
D)  revenue centre.

Question 3

Organize the following list into the appropriate balanced scorecard perspectives. Include "Sustainability" as an addition to the four traditional perspectives.
Ecoefficient logistics
Percentage of defective product units
Return on assets
Number of patents
Quantity of product waste
Employee turnover rate
Percentage of processes with real-time feedback
Profit per salesperson
Training hours per employee
Earnings per share
Number of new customers
Percentage of on-time deliveries by suppliers
Percentage of error free invoices
Megawatt hours of electricity used
Manufacture cycle time
Market channel profitability
Percentage use of recyclable materials
Employee competence measures

Accepted Answer

Financial Perspective:
Return on assets,

Question 4

The number of employee suggestions implemented and percentage of the sales force with access to real-time inventory levels would be examples of the

Accepted Answer

A)  financial perspective. 
B)  customer perspective. 
C)  internal business perspective. 
D)  learning and growth perspective. 
A)  financial perspective. 
B)  customer perspective. 
C)  internal business perspective. 
D)  learning and growth perspective.

Question 5

The convenience store owned by a national chain is likely to be classified as a(n)

Accepted Answer

A)  cost centre. 
B)  investment centre. 
C)  profit centre. 
D)  revenue centre. 
A)  cost centre. 
B)  investment centre. 
C)  profit centre. 
D)  revenue centre.

Question 6

The manager of the corporate division of Hollister would be in charge of a(n)

Accepted Answer

A)  cost centre. 
B)  investment centre. 
C)  profit centre. 
D)  revenue centre. 
A)  cost centre. 
B)  investment centre. 
C)  profit centre. 
D)  revenue centre.

Question 7

Cost centre performance reports typically focus on the static budget variance.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A)  $4,605,500 
B)  $7,230,500 
C)  $4,545,000 
D)  $4,507,500 
A)  $4,605,500 
B)  $7,230,500 
C)  $4,545,000 
D)  $4,507,500

Question 9

The performance evaluation of cost centres is typically based on which of the following?

Accepted Answer

A)  Sales volume variance 
B)  ROI 
C)  Flexible budget variance 
D)  Static budget variance 
A)  Sales volume variance 
B)  ROI 
C)  Flexible budget variance 
D)  Static budget variance

Question 10

Use the information below to answer the following question(s):
The following data relates to Logan Electric and its Light Bulb Division.
  
-What is the Light Bulb Division's Return on Investment (ROI)?

Accepted Answer

A)  25% 
B)  10% 
C)  30.6% 
D)  18.33% 
A)  25% 
B)  10% 
C)  30.6% 
D)  18.33%

Question 11

What is a limitation of financial performance measurements?

Accepted Answer

A)  They are not useful for benchmarking. 
B)  They do not motivate managers. 
C)  They tend to focus on long-term performance. 
D)  They tend to be lag indicators. 
A)  They are not useful for benchmarking. 
B)  They do not motivate managers. 
C)  They tend to focus on long-term performance. 
D)  They tend to be lag indicators.

Question 12

Rose Company has a target rate of return of 10%, an ROI of 36%, and asset turnover of 3.0. The profit margin for Rose Company would be closest to

Accepted Answer

A)  3%. 
B)  12%. 
C)  30%. 
D)  108%. 
A)  3%. 
B)  12%. 
C)  30%. 
D)  108%.

Question 13

Which of the following statements is FALSE?

Accepted Answer

A)  A centralized structure does not empower employees to handle customer complaints directly. 
B)  A decentralized structure forces top management to lose some control over the organization. 
C)  Decentralization slows responsiveness to local needs for decision making. 
D)  Decentralization can increase motivation by allowing managers to exercise greater individual initiative. 
A)  A centralized structure does not empower employees to handle customer complaints directly. 
B)  A decentralized structure forces top management to lose some control over the organization. 
C)  Decentralization slows responsiveness to local needs for decision making. 
D)  Decentralization can increase motivation by allowing managers to exercise greater individual initiative.

Question 14

Corrective actions are sometimes taken as a result of which of the following goals of a performance evaluation system?

Accepted Answer

A)  Benchmarking 
B)  Communicating expectations 
C)  Promoting goal congruence 
D)  Providing feedback 
A)  Benchmarking 
B)  Communicating expectations 
C)  Promoting goal congruence 
D)  Providing feedback

Question 15

The manager of the accounting department at Nike would be in charge of a(n)

Accepted Answer

A)  cost centre. 
B)  investment centre. 
C)  profit centre. 
D)  revenue centre. 
A)  cost centre. 
B)  investment centre. 
C)  profit centre. 
D)  revenue centre.

Question 16

Goal incongruence frequently exists in centralized organizations.

Accepted Answer

A) True 
 B)False

Question 17

A cost centre will show revenues and costs.

Accepted Answer

A) True 
 B)False

Question 18

The Engine Division of The Cleveland Automotive Corporation had sales of $7,200,000 and operating income of $864,000 last year. The total assets of the Engine Division were $3,200,000 while current liabilities were $800,000. The Cleveland Automotive Corporation's target rate of return is 13% while its weighted average cost of capital is 9%. The effective tax rate for the company is 45%.
Required:
a. Calculate the sales margin.
b. Calculate the capital turnover.
c. Calculate the return on investment (ROI).
d. Calculate the residual income.

Accepted Answer

The answer of The Engine Division of The Cleveland Automotive...

Question 19

KPI in the Balanced Scorecard stands for Key Performance Indicator.

Accepted Answer

A) True 
 B)False

Question 20

Management by exception would dictate that the manager investigate which of the following variances?

Accepted Answer

A)  Variances which are greater than a certain dollar amount or percentage 
B)  Variances which are less than a certain dollar amount or percentage 
C)  All unfavourable variances 
D)  All favourable and unfavourable variances 
A)  Variances which are greater than a certain dollar amount or percentage 
B)  Variances which are less than a certain dollar amount or percentage 
C)  All unfavourable variances 
D)  All favourable and unfavourable variances

An advantage of decentralization is that it

The manager of a local Walmart would be in charge of a(n)

The number of employee suggestions implemented and percentage of the sales force with access to real-time inventory levels would be examples of the

The convenience store owned by a national chain is likely to be classified as a(n)

The manager of the corporate division of Hollister would be in charge of a(n)

Cost centre performance reports typically focus on the static budget variance.

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

The performance evaluation of cost centres is typically based on which of the following?

Use the information below to answer the following question(s): The following data relates to Logan Electric and its Light Bulb Division. -What is the Light Bulb Division's Return on Investment (ROI)?

What is a limitation of financial performance measurements?

Rose Company has a target rate of return of 10%, an ROI of 36%, and asset turnover of 3.0. The profit margin for Rose Company would be closest to

Which of the following statements is FALSE?

Corrective actions are sometimes taken as a result of which of the following goals of a performance evaluation system?

The manager of the accounting department at Nike would be in charge of a(n)

Goal incongruence frequently exists in centralized organizations.

A cost centre will show revenues and costs.

KPI in the Balanced Scorecard stands for Key Performance Indicator.

Management by exception would dictate that the manager investigate which of the following variances?

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

An advantage of decentralization is that it

The manager of a local Walmart would be in charge of a(n)

The number of employee suggestions implemented and percentage of the sales force with access to real-time inventory levels would be examples of the

The convenience store owned by a national chain is likely to be classified as a(n)

The manager of the corporate division of Hollister would be in charge of a(n)

Cost centre performance reports typically focus on the static budget variance.

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

The performance evaluation of cost centres is typically based on which of the following?

Use the information below to answer the following question(s): The following data relates to Logan Electric and its Light Bulb Division. -What is the Light Bulb Division's Return on Investment (ROI)?

What is a limitation of financial performance measurements?

Rose Company has a target rate of return of 10%, an ROI of 36%, and asset turnover of 3.0. The profit margin for Rose Company would be closest to

Which of the following statements is FALSE?

Corrective actions are sometimes taken as a result of which of the following goals of a performance evaluation system?

The manager of the accounting department at Nike would be in charge of a(n)

Goal incongruence frequently exists in centralized organizations.

A cost centre will show revenues and costs.

KPI in the Balanced Scorecard stands for Key Performance Indicator.

Management by exception would dictate that the manager investigate which of the following variances?

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