Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

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?

Accepted Answer

A)  Salaries of cutting machine workers 
B)  Cost of electricity for the Northwest Division 
C)  Lumber Department hauling costs 
D)  Vice president's salary 
A)  Salaries of cutting machine workers 
B)  Cost of electricity for the Northwest Division 
C)  Lumber Department hauling costs 
D)  Vice president's salary

Question 3

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

Accepted Answer

A)  Flexible budgeting 
B)  Zero-based budgeting 
C)  Variable costing 
D)  Any of these choices 
A)  Flexible budgeting 
B)  Zero-based budgeting 
C)  Variable costing 
D)  Any of these choices

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Economic value added is synonymous with shareholder wealth created by an investment center.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A)  the entire company. 
B)  responsibility centers. 
C)  managers. 
D)  all of these choices. 
A)  the entire company. 
B)  responsibility centers. 
C)  managers. 
D)  all of these choices.

Question 7

A performance management and evaluation system is mainly utilized to account for and report on financial performance.

Accepted Answer

A) True 
 B)False

Question 8

A performance management and evaluation system is utilized so that a company can identify which of the following?

Accepted Answer

A)  How well it is doing and where it is going 
B)  How satisfied investors are with their return on investment 
C)  How satisfied both customers and employees are 
D)  How well it is doing, where it is going, and what improvements will bring in more profit 
A)  How well it is doing and where it is going 
B)  How satisfied investors are with their return on investment 
C)  How satisfied both customers and employees are 
D)  How well it is doing, where it is going, and what improvements will bring in more profit

Question 9

As the staff accountant for NYC Investment Center #1, compute the center's EVA, using the following information:

Accepted Answer

EVA = ($900,000 - $2

Question 10

Performance reports should include

Accepted Answer

A)  controllable costs and revenues for a specific responsibility center. 
B)  all costs, revenues, and resources for a specific responsibility center. 
C)  controllable costs for a specific responsibility center. 
D)  controllable costs, revenues, and resources for a specific responsibility center. 
A)  controllable costs and revenues for a specific responsibility center. 
B)  all costs, revenues, and resources for a specific responsibility center. 
C)  controllable costs for a specific responsibility center. 
D)  controllable costs, revenues, and resources for a specific responsibility center.

Question 11

The manager of Center E provides human resource support for the other centers in the company. What type of responsibility center is Center E?

Accepted Answer

A)  Cost center 
B)  Discretionary cost center 
C)  Revenue center 
D)  Investment center 
A)  Cost center 
B)  Discretionary cost center 
C)  Revenue center 
D)  Investment center

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

The equation for economic value added includes pretax operating income as well as current liabilities.

Accepted Answer

A) True 
 B)False

Question 14

A performance management and evaluation system allows a company to identify how well it is doing, where it is going, and what improvements will make it more profitable.

Accepted Answer

A) True 
 B)False

Question 15

A manager can improve EVA by

Accepted Answer

A)  increasing assets and decreasing costs. 
B)  increasing sales and assets. 
C)  increasing cost of capital and assets. 
D)  decreasing assets and lowering cost of capital. 
A)  increasing assets and decreasing costs. 
B)  increasing sales and assets. 
C)  increasing cost of capital and assets. 
D)  decreasing assets and lowering cost of capital.

Question 16

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.

Accepted Answer

The answer of The CEO of Buckstars is interested in...

Question 17

A good example of a profit center would be

Accepted Answer

A)  a car manufacturer's assembly line. 
B)  a local Home Depot store. 
C)  Avis Car Rental's national reservation center. 
D)  a manufacturer's human resources department. 
A)  a car manufacturer's assembly line. 
B)  a local Home Depot store. 
C)  Avis Car Rental's national reservation center. 
D)  a manufacturer's human resources department.

Exam 25: Performance Management and Evaluation

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

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?

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

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

Economic value added is synonymous with shareholder wealth created by an investment center.

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

A performance management and evaluation system is mainly utilized to account for and report on financial performance.

A performance management and evaluation system is utilized so that a company can identify which of the following?

As the staff accountant for NYC Investment Center #1, compute the center's EVA, using the following information:

Performance reports should include

The manager of Center E provides human resource support for the other centers in the company. What type of responsibility center is Center E?

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

The equation for economic value added includes pretax operating income as well as current liabilities.

A performance management and evaluation system allows a company to identify how well it is doing, where it is going, and what improvements will make it more profitable.

A manager can improve EVA by

A good example of a profit center would be

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Completing the Accounting Cycle

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Internal Control

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Contributed Capital

Long Term Liabilities

The Corporate Income Statement and the Statement of Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Partnerships

The Changing Business Environment-A Managers Pers

Cost Concepts and Cost Allocation

Costing Systems: Job Order Costing

Costing Systems Process Costing

Activity-Based Systems-Abm and Lean

Cost Behavior Analysis

The Budgeting Process

Standard Costing and Variance Analysis

Short Run Decision Analysis

Capital Investment Analysis

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