Exam 7: Performance Management and Evaluation

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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?

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Compute the asset turnover (rounded to two decimal places) for the Tim Tom investment center as shown below. Tim Tom Subsidiary Total sales \ 1,600 Operating income \ 100 Average assets invested \ 900 Profit margin ? Asset turnover ? ROI ?

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

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Performance reports allow comparisons between actual performance and budget expectations.

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

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

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Manufacturing companies rarely utilize responsibility accounting.

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

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How is the contribution margin calculated when utilizing variable costing?

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Like ROI, residual income is a performance measure displayed as a ratio.

(True/False)
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Compute the average assets invested for the Hi Ho investment center as shown below. Hil Ho Subsidiary Total sales \ 20,000 Operating income \ 5,000 Beginning assets invested \ 14,000 Encling assets invested \ 14,600 Average assets invested \ ? DesiredROI 25\% Resichual income \ ?

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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?

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Which of the following is a type of incentive compensation?

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

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

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Chow Company has a number of investment centers to track on a day-to-day basis. The following represent key figures related to one of Chow's investment centers for May 20xx: Opereting income \ 6,000,000 Sales 15,000,000 Asset turnover 55\% What is the investment center's ROI for May 20xx (rounded to two decimal places)?

(Multiple Choice)
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How many different types of responsibility centers exist?

(Multiple Choice)
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Compute the residual income for the Hi Ho investment center as shown below. Hi Ho Subsidiary Total sales \ 20,000 Operating income \ 4,300 Beginning assets invested \ 14,000 Encling assets invested \ 16,000 Average assets invested \ ? DesiredROI 25\% Resichual income \ ?

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Why might stock options not be the best way to promote coordination of goals?

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As the staff accountant for Investment Centers Beta and Gamma, compute the residual income for each investment center, using the following information: Beta Gamuna Operating income \ 850,000 \ 1,000,000 Actual ROI 28\% 49\% Desired ROI 32\% 35\% Assetsinvested \ 585,000 \ 750,000

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