Question 1

Performance reports allow comparisons between actual performance and budget expectations.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

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 4

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 5

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

Accepted Answer

A) True 
 B)False

Question 6

Variable costing is a method of reporting that deals only with a manager's controllable costs,variable costs.

Accepted Answer

A) True 
 B)False

Question 7

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 8

Determine the March 2014 residual income for an investment center with the following information:

Accepted Answer

A) $5,180,000 
B) $3,094,000 
C) $2,086,000 
D) $8,806,000 
A) $5,180,000 
B) $3,094,000 
C) $2,086,000 
D) $8,806,000

Question 9

Identify the following and show the formula for calculating each:
a.ROI
b.RI
c.EVA

Accepted Answer

a.ROI = Return on Investment
Formula:
RO

Question 10

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 11

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

Accepted Answer

A) True 
 B)False

Question 12

Many organizations utilize responsibility accounting

Accepted Answer

A) to increasing the responsibilities of the accountants. 
B) to assist in performance management and evaluation. 
C) as a substitute to performance measurement. 
D) as an alternative to generally accepted accounting principles. 
A) to increasing the responsibilities of the accountants. 
B) to assist in performance management and evaluation. 
C) as a substitute to performance measurement. 
D) as an alternative to generally accepted accounting principles.

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

A responsibility center in which the relationship between resources and products or services produced is not well defined is known as a(n)

Accepted Answer

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

Question 15

Profit-sharing plan is a common type of incentive compensation.

Accepted Answer

A) True 
 B)False

Question 16

The way in which the performance of a cost center is evaluated is similar to

Accepted Answer

A) job order costing. 
B) standard costing. 
C) process costing. 
D) marginal costing. 
A) job order costing. 
B) standard costing. 
C) process costing. 
D) marginal costing.

Question 17

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.

Accepted Answer

The answer of Using the following information,prepare a single report...

Question 18

ROI is a performance measure,which uses information only from a company's income statement.

Accepted Answer

A) True 
 B)False

Question 19

Compute the profit margin (rounded to nearest percent)for Titania Corporation's Investment center using the following information.

Accepted Answer

A) 5% 
B) 6% 
C) 8% 
D) 13% 
A) 5% 
B) 6% 
C) 8% 
D) 13%

Question 20

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.

Exam 23: Flexible Budgets and Performance Analysis

Performance reports allow comparisons between actual performance and budget expectations.

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

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

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

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

Variable costing is a method of reporting that deals only with a manager's controllable costs,variable costs.

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.

Determine the March 2014 residual income for an investment center with the following information:

Identify the following and show the formula for calculating each: a.ROI b.RI c.EVA

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

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

Many organizations utilize responsibility accounting

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

A responsibility center in which the relationship between resources and products or services produced is not well defined is known as a(n)

Profit-sharing plan is a common type of incentive compensation.

The way in which the performance of a cost center is evaluated is similar to

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.

ROI is a performance measure,which uses information only from a company's income statement.

Compute the profit margin (rounded to nearest percent)for Titania Corporation's Investment center using the following information.

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

Accounting Principles and the Financial Statements

Analyzing and Recording Business Transactions

Adjusting the Accounts

Completing the Accounting Cycle

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

Accounting for Partnerships

Accounting for Corporations

Long Term Liabilities

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 and Capital Budgeting

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