Exam 7: Performance Management and Evaluation

A variable costing income statement is the same as

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

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

What are some of the limitations of utilizing ROI, residual income, and EVA to measure the performance of investment centers?

Compute the profit margin (rounded to nearest percent) for the Tim Tom investment center as shown below. Tim Tom Subsidiary Total sales \ 1,600 Operating income \ 140 Average assets invested \ 900 Profit margin ? Asset turnover ? ROI ?

Economic value added is synonymous with shareholder wealth created by an investment center.

A manager can improve the economic value of an investment center by decreasing assets.

What is the business purpose of the balanced scorecard, and how does it benefit an organization?

A performance management and evaluation system is utilized so that a company can identify which of the following?

The balanced scorecard links the perspectives of an organization's stakeholders with the organization's mission and vision, performance measures, strategic plan, and resources.

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.

Most organizations use very similar performance measures in their day-to-day business operations.

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.

Use the following performance report for a cost center of the Dry Cat Food Division for the month ended December 31 to answer the question below. -What is the actual total cost?

Use the following performance report for a profit center of the Wet Cat Food Company for the month ended December 31 to answer the question below. -What was the actual profit center income?

A performance management and evaluation system is mainly utilized to account for and report on financial performance.

One of the overall goals of the Pancake House Restaurant is customer satisfaction. In the light of that goal, match the internal business processes perspective with the appropriate objective.

Compute the May 20xx EVA for an investment center with the following information: Pre-tax operating income for May 20 18,000,500 Income tax expense for May 20xx 5,100,000 Assets at May 31,20kx 13,200,500 Current liabilities at May 31,20 10,000,000 Long term liabilities at May 31,20 3,500,000 Minimum desired rate of return 20\% Minimum desired rate of return 20%

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

The manager of Center E provides human resource support for the other centers in the company. What type of responsibility center is Center E?