Question 1

Cost of capital is the minimum desired rate of return on a particular investment.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is a performance measure?

Accepted Answer

A) Quality of raw materials used in production 
B) Number of orders shipped in a day 
C) Level of customer satisfaction 
D) All of these choices 
A) Quality of raw materials used in production 
B) Number of orders shipped in a day 
C) Level of customer satisfaction 
D) All of these choices

Question 3

Which of the following represents the number of sales dollars generated by each dollar invested in assets?

Accepted Answer

A) Asset turnover 
B) Average assets invested 
C) Profit margin 
D) Operating income 
A) Asset turnover 
B) Average assets invested 
C) Profit margin 
D) Operating income

Question 4

The balanced scorecard is a framework that links the perspectives of an organization's stakeholders with its

Accepted Answer

A) goals and vision,performance goals,strategic plan,and financial resources. 
B) mission and overall plan,performance measures,departmental plans,and resources. 
C) mission and vision,performance measures,strategic plans,and resources. 
D) mission and vision,performance goals,overall plan,and resources. 
A) goals and vision,performance goals,strategic plan,and financial resources. 
B) mission and overall plan,performance measures,departmental plans,and resources. 
C) mission and vision,performance measures,strategic plans,and resources. 
D) mission and vision,performance goals,overall plan,and resources.

Question 5

The format of a variable costing income statement is similar to a(n)

Accepted Answer

A) contribution margin income statement. 
B) traditional income statement. 
C) audited income statement. 
D) single-step income statement. 
A) contribution margin income statement. 
B) traditional income statement. 
C) audited income statement. 
D) single-step income statement.

Question 6

The logical linking of goals to measurable objectives and targets,and the tying of appropriate compensation incentives to the achievement of such objectives and targets are critical to the successful coordination of goals.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

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

Question 8

All organizations use same performance measures in their day-to-day business operations.

Accepted Answer

A) True 
 B)False

Question 9

Use the following performance report for a cost center of the Dry Cat Food Division for the month ended December 31 to answer the questions below.   
Using the information provided for Dry Cat Food division.
-The flexible budget is based on how many units produced?

Accepted Answer

A) 0 units 
B) 30 units 
C) 70 units 
D) 100 units 
A) 0 units 
B) 30 units 
C) 70 units 
D) 100 units

Question 10

A manager can improve the economic value of an investment center by increasing sales.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

Some items that can affect an investment

Question 12

Compute the residual income for Zeus Company's investment center from the information below.

Accepted Answer

A) $600 
B) $3,100 
C) $4,350 
D) $1,850 
A) $600 
B) $3,100 
C) $4,350 
D) $1,850

Question 13

Which of the following is a common type of incentive compensation?

Accepted Answer

A) Health insurance 
B) Profit-sharing plans 
C) Pension plans 
D) Flexible spending programs 
A) Health insurance 
B) Profit-sharing plans 
C) Pension plans 
D) Flexible spending programs

Question 14

One of the major goals of the Sweetcake Restaurant is customer satisfaction.In the light of this goal,match the internal business processes perspective with the appropriate target.

Accepted Answer

A) Increase the continuous training to chefs 
B) Serve the food within 10 minutes of placing an order 
C) Make sure the customer appreciation program is successful 
D) Increase the profits of the restaurant 
A) Increase the continuous training to chefs 
B) Serve the food within 10 minutes of placing an order 
C) Make sure the customer appreciation program is successful 
D) Increase the profits of the restaurant

Question 15

A manager can improve EVA by

Accepted Answer

A) decreasing assets. 
B) increasing tax expense. 
C) increasing cost of capital. 
D) decreasing current liabilities. 
A) decreasing assets. 
B) increasing tax expense. 
C) increasing cost of capital. 
D) decreasing current liabilities.

Question 16

Use the following performance report for a cost center of the Dry Cat Food Division for the month ended December 31 to answer the questions below.   
Using the information provided for Dry Cat Food division.
-What were the actual sales?

Accepted Answer

A) $185 
B) $35 
C) $190 
D) $40 
A) $185 
B) $35 
C) $190 
D) $40

Question 17

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

Accepted Answer

A) ROI. 
B) cost of capital. 
C) residual income. 
D) profit margin. 
A) ROI. 
B) cost of capital. 
C) residual income. 
D) profit margin.

Question 18

Use the following performance report for a cost center of the Dry Cat Food Division for the month ended December 31 to answer the questions below.   
Using the information provided for Dry Cat Food division.
-What is the direct materials variance between the actual results and the flexible budget?

Accepted Answer

A) $14 (U) 
B) $14 (F) 
C) $30 (U) 
D) $30 (F) 
A) $14 (U) 
B) $14 (F) 
C) $30 (U) 
D) $30 (F)

Question 19

Which of the following is a stakeholder of an organization?

Accepted Answer

A) The accounts receivable clerk of the organization 
B) A vice president of the organization 
C) A line supervisor of the organization 
D) All of these choices 
A) The accounts receivable clerk of the organization 
B) A vice president of the organization 
C) A line supervisor of the organization 
D) All of these choices

Question 20

Responsibility accounting is of least help to manufacturing companies.

Accepted Answer

A) True 
 B)False

Exam 21: Flexible Budgets and Performance Analysis

Cost of capital is the minimum desired rate of return on a particular investment.

Which of the following is a performance measure?

Which of the following represents the number of sales dollars generated by each dollar invested in assets?

The balanced scorecard is a framework that links the perspectives of an organization's stakeholders with its

The format of a variable costing income statement is similar to a(n)

The logical linking of goals to measurable objectives and targets,and the tying of appropriate compensation incentives to the achievement of such objectives and targets are critical to the successful coordination of goals.

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

All organizations use same performance measures in their day-to-day business operations.

Use the following performance report for a cost center of the Dry Cat Food Division for the month ended December 31 to answer the questions below. Using the information provided for Dry Cat Food division. -The flexible budget is based on how many units produced?

A manager can improve the economic value of an investment center by increasing sales.

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

Compute the residual income for Zeus Company's investment center from the information below.

Which of the following is a common type of incentive compensation?

One of the major goals of the Sweetcake Restaurant is customer satisfaction.In the light of this goal,match the internal business processes perspective with the appropriate target.

A manager can improve EVA by

Use the following performance report for a cost center of the Dry Cat Food Division for the month ended December 31 to answer the questions below. Using the information provided for Dry Cat Food division. -What were the actual sales?

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

Use the following performance report for a cost center of the Dry Cat Food Division for the month ended December 31 to answer the questions below. Using the information provided for Dry Cat Food division. -What is the direct materials variance between the actual results and the flexible budget?

Which of the following is a stakeholder of an organization?

Responsibility accounting is of least help to manufacturing companies.

Uses of Accounting Information and the Financial Statements

Measurement Concepts: Recording Business Transactions

Measuring Business Income: Adjusting the Accounts

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Long-Term Assets

Current Liabilities and Fair Value Accounting

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting and Cost Concepts

Costing Systems: Job Order Costing

Costing Systems: Process Costing

Value-Based Systems: Activity-Based Costing and Lean Accounting

Cost-Volume-Profit Analysis

The Budgeting Process

Standard Costing and Variance Analysis

Short-Run Decision Analysis

Capital Investment Analysis

Pricing Decisions, including Target Costing and Transfer Pricing

Quality Management and Measurement

Accounting for Unincorporated Businesses

Accounting for Investments

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