Exam 21: Flexible Budgets and Performance Analysis

If a performance report contains items that are in a manager's control,the entire responsibility accounting system can be called into question.

Tying compensation incentives to performance targets decreases the likelihood that the goals of responsibility centers,managers,and the entire organization will be well coordinated.

Determine the October 2014 ROI for an investment center with the following information: Round percentage answer to two decimal places.

The manager of Center C is only responsible for generating and processing online orders of a large retailer.What type of responsibility center is Center C?

The performance of Steve,the manager of Center B,is evaluated the end of every month,by comparing the amount spent on manufacturing overhead with the budgets prepared at the beginning of the month.What type of responsibility center is Center B?

When compared with which of the following,the EVA of an investment center will be more meaningful?

Compute the current liabilities for the Atlas Technologies using the information given below:

A variable costing income statement is also called a traditional income statement.

Compute the return on investment (rounded to nearest percent)for the Tim Tom investment center from the information given below.

Using the following information,prepare a single report setting forth the variable costing income statement as well as a performance report for Profit Center West.

As the staff accountant for Investment Centers Beta and Gamma,compute the residual income for each investment center,using the following information:

Performance reports allow comparisons between actual performance and budget expectations.

The CEO of Star Coffee is interested in reviewing the May 2014 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.

A responsibility accounting system ensures that

It is necessary for managers to fully understand the causal relationship between their actions and the organization's overall performance to get results.

ROI,residual income,and economic value added all represent performance measures that can be utilized to determine investment center performance.

Managers at all levels are evaluated in terms of their ability to manage their areas of responsibility in keeping with organizational goals.

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

A flexible budget is derived by dividing actual unit costs by the standard unit costs.

Performance measurement is the use of quantitative tools to gauge an organization's performance in relation to a specific goal or an expected outcome.