Question 1

Provide three examples of something that an organization might want to measure and a performance measurement that could be utilized in each example.

Accepted Answer

Answers will vary.Th

Question 2

The equation for economic value added excludes operating income and current liabilities.

Accepted Answer

A) True 
 B)False

Question 3

In general,there are ________ types of responsibility centers.

Accepted Answer

A) two 
B) five 
C) ten 
D) three 
A) two 
B) five 
C) ten 
D) three

Question 4

The manager of Center A of Harry International is responsible for generating cash inflows and incurring costs with the goal of generating returns for the company.The manager has no responsibility for assets.What type of responsibility center is Center A?

Accepted Answer

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

Question 5

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 labor variance between the actual results and the flexible budget?

Accepted Answer

A) $10 (U) 
B) $10 (F) 
C) $60 (U) 
D) $60 (F) 
A) $10 (U) 
B) $10 (F) 
C) $60 (U) 
D) $60 (F)

Question 6

A performance management and evaluation system is a set of procedures that account for and report on

Accepted Answer

A) qualitative performance. 
B) standard performance. 
C) employee performance. 
D) financial and nonfinancial performance. 
A) qualitative performance. 
B) standard performance. 
C) employee performance. 
D) financial and nonfinancial performance.

Question 7

Cash bonuses are usually given to encourage short-term performance.

Accepted Answer

A) True 
 B)False

Question 8

Compute the asset turnover (rounded to two decimal places)for Titania Corporation's investment center from the information given below.

Accepted Answer

A) 1.78 
B) 0.56 
C) 0.11 
D) 9.00 
A) 1.78 
B) 0.56 
C) 0.11 
D) 9.00

Question 9

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 10

Unlike ROI,residual income is expressed in dollars.

Accepted Answer

A) True 
 B)False

Question 11

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 actual total cost?

Accepted Answer

A) $521 
B) $595 
C) $744 
D) $1,031 
A) $521 
B) $595 
C) $744 
D) $1,031

Question 12

A manufacturing company's human resource department is most likely a

Accepted Answer

A) cost center. 
B) discretionary cost center. 
C) revenue center. 
D) profit center. 
A) cost center. 
B) discretionary cost center. 
C) revenue center. 
D) profit center.

Question 13

Compute the average assets invested for the Omega International's investment center as shown below.

Accepted Answer

A) $14,350 
B) $14,400 
C) $14,300 
D) $14,250 
A) $14,350 
B) $14,400 
C) $14,300 
D) $14,250

Question 14

Using the following information,prepare a traditional income statement and a variable costing income statement:

Accepted Answer

The answer of Using the following information,prepare a traditional income...

Question 15

Why are managers more likely to achieve their objectives in both the short term and the long term when they utilize a tool such as the balanced scorecard?

Accepted Answer

Managers are more likely to achieve thei

Question 16

How is the contribution margin calculated when utilizing variable costing?

Accepted Answer

A) Sales less variable cost of goods sold 
B) Sales less variable cost of goods sold,less variable selling and administrative expenses 
C) Sales less cost of goods sold 
D) Sales less variable cost of goods sold,less variable selling and administrative expenses,less fixed cost of goods sold,less fixed selling and administrative expenses 
A) Sales less variable cost of goods sold 
B) Sales less variable cost of goods sold,less variable selling and administrative expenses 
C) Sales less cost of goods sold 
D) Sales less variable cost of goods sold,less variable selling and administrative expenses,less fixed cost of goods sold,less fixed selling and administrative expenses

Question 17

The economic value added performance measure focuses on long-term financial performance.

Accepted Answer

A) True 
 B)False

Question 18

An organization's four basic stakeholder groups include investors,employees,internal business processes,and customers.

Accepted Answer

A) True 
 B)False

Question 19

One of the drawback of the return on investment performance measure is that it considers both operating and nonoperating income.

Accepted Answer

A) True 
 B)False

Question 20

The manager of Center E provides administrative activities 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

Exam 21: Flexible Budgets and Performance Analysis

Provide three examples of something that an organization might want to measure and a performance measurement that could be utilized in each example.

The equation for economic value added excludes operating income and current liabilities.

In general,there are ________ types of responsibility centers.

The manager of Center A of Harry International is responsible for generating cash inflows and incurring costs with the goal of generating returns for the company.The manager has no responsibility for assets.What type of responsibility center is Center A?

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 labor variance between the actual results and the flexible budget?

A performance management and evaluation system is a set of procedures that account for and report on

Cash bonuses are usually given to encourage short-term performance.

Compute the asset turnover (rounded to two decimal places)for Titania Corporation's investment center from the information given below.

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.

Unlike ROI,residual income is expressed in dollars.

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 actual total cost?

A manufacturing company's human resource department is most likely a

Compute the average assets invested for the Omega International's investment center as shown below.

Using the following information,prepare a traditional income statement and a variable costing income statement:

Why are managers more likely to achieve their objectives in both the short term and the long term when they utilize a tool such as the balanced scorecard?

How is the contribution margin calculated when utilizing variable costing?

The economic value added performance measure focuses on long-term financial performance.

An organization's four basic stakeholder groups include investors,employees,internal business processes,and customers.

One of the drawback of the return on investment performance measure is that it considers both operating and nonoperating income.

The manager of Center E provides administrative activities for the other centers in the company.What type of responsibility center is Center E?

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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