Question 1

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?

Accepted Answer

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

Question 2

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

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 3

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 4

Performance reports allow comparisons between actual performance and budget expectations.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

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)  quantitative performance. 
C)  employee performance. 
D)  quantitative and qualitative performance. 
A)  qualitative performance. 
B)  quantitative performance. 
C)  employee performance. 
D)  quantitative and qualitative performance.

Question 7

Manufacturing companies rarely utilize responsibility accounting.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

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 10

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

Accepted Answer

A) True 
 B)False

Question 11

Compute the average assets invested for the Hi Ho investment center as shown below. 
$\begin{array}{ll}
& \text { Hil Ho Subsidiary } \
\text { Total sales } & \$ 20,000 \
\text { Operating income } & \$ 5,000 \
\text { Beginning assets invested } & \$ 14,000 \
\text { Encling assets invested } & \$ 14,600 \
\text { Average assets invested } & \$ ? \
\text { DesiredROI } & 25 \% \
\text { Resichual income } & \$ ?
\end{array}$

Accepted Answer

A)  $14,400 
B)  $14,450 
C)  $14,350 
D)  $14,300 
A)  $14,400 
B)  $14,450 
C)  $14,350 
D)  $14,300

Question 12

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 13

Which of the following is a 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

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.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

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: $$\begin{array} { | l | l | } 
\hline \text { Opereting income } & \$ 6,000,000 \
\hline \text { Sales } & 15,000,000 \
\hline \text { Asset turnover } & 55 \% \
\hline &
\end{array}$$ What is the investment center's ROI for May 20xx (rounded to two decimal places)?

Accepted Answer

A)  27.5 percent 
B)  33 percent 
C)  55 percent 
D)  22 percent 
A)  27.5 percent 
B)  33 percent 
C)  55 percent 
D)  22 percent

Question 17

How many different types of responsibility centers exist?

Accepted Answer

A)  2 
B)  5 
C)  10 
D)  3 
A)  2 
B)  5 
C)  10 
D)  3

Question 18

Compute the residual income for the Hi Ho investment center as shown below. $\begin{array}{ll}
& \text { Hi Ho Subsidiary } \
\text { Total sales } & \$ 20,000 \
\text { Operating income } & \$ 4,300 \
\text { Beginning assets invested } & \$ 14,000 \
\text { Encling assets invested } & \$ 16,000 \
\text { Average assets invested } & \$ ? \
\text { DesiredROI } & 25 \% \
\text { Resichual income } & \$ ?
\end{array}$

Accepted Answer

A)  $550 
B)  $3,050 
C)  $4,300 
D)  $1,800 
A)  $550 
B)  $3,050 
C)  $4,300 
D)  $1,800

Question 19

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

Accepted Answer

A)  Stock prices can fluctuate quickly. 
B)  Many of the variables that affect stock prices are beyond a manager's control. 
C)  Employees generally do not value stock options very highly. 
D)  None of these choices 
A)  Stock prices can fluctuate quickly. 
B)  Many of the variables that affect stock prices are beyond a manager's control. 
C)  Employees generally do not value stock options very highly. 
D)  None of these choices

Question 20

As the staff accountant for Investment Centers Beta and Gamma, compute the residual income for each investment center, using the following information:
 $\begin{array}{|l|l|l|}
\hline & \text { Beta } & \text { Gamuna } \
\hline \text { Operating income } & \$ 850,000 & \$ 1,000,000 \
\hline \text { Actual ROI } & 28 \% & 49 \% \
\hline \text { Desired ROI } & 32 \% & 35 \% \
\hline \text { Assetsinvested } & \$ 585,000 & \$ 750,000 \
\hline
\end{array}$

Accepted Answer

Investment Center Beta: $850,0

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?

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 ?

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

Performance reports allow comparisons between actual performance and budget expectations.

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

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

Manufacturing companies rarely utilize responsibility accounting.

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

How is the contribution margin calculated when utilizing variable costing?

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

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 \ ?

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?

Which of the following is a type of incentive compensation?

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.

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

How many different types of responsibility centers exist?

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 \ ?

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

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

The Changing Business Environment - a Managers Perspective

Costing Systems- Job Order Costing

Costing Systems- Process Costing

Value-Based Systems- Abm and Lean

Cost Behavior Analysis

The Budgeting Process

Standard Costing and Variance Analysis

Short Run Decision Analysis

Capital Investment Analysis

Pricing Decisions, Incl Target Costing and Transfer Pricing

Quality Management and Measurement

Financial Analysis of Performance

Filters

Exam 7: Performance Management and Evaluation

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?

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 ?

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

Performance reports allow comparisons between actual performance and budget expectations.

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

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

Manufacturing companies rarely utilize responsibility accounting.

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

How is the contribution margin calculated when utilizing variable costing?

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

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 \ ?

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?

Which of the following is a type of incentive compensation?

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.

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

How many different types of responsibility centers exist?

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 \ ?

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

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

The Changing Business Environment - a Managers Perspective

Costing Systems- Job Order Costing

Costing Systems- Process Costing

Value-Based Systems- Abm and Lean

Cost Behavior Analysis

The Budgeting Process

Standard Costing and Variance Analysis

Short Run Decision Analysis

Capital Investment Analysis

Pricing Decisions, Incl Target Costing and Transfer Pricing

Quality Management and Measurement

Financial Analysis of Performance

Filters