Question 1

Many organizations utilize responsibility accounting

Accepted Answer

A)  to assist in building performance measures for the organization. 
B)  to assist in performance management and evaluation. 
C)  solely to evaluate how well employees are handling their responsibilities. 
D)  as an alternative to generally accepted accounting principles. 
A)  to assist in building performance measures for the organization. 
B)  to assist in performance management and evaluation. 
C)  solely to evaluate how well employees are handling their responsibilities. 
D)  as an alternative to generally accepted accounting principles.

Question 2

In evaluating investment center performance, ROI proves to be such a comprehensive performance measure that other performance measures are rarely needed.

Accepted Answer

A) True 
 B)False

Question 3

A manager can improve EVA by

Accepted Answer

A)  increasing assets and decreasing costs. 
B)  increasing sales and assets. 
C)  increasing cost of capital and assets. 
D)  decreasing assets and lowering cost of capital. 
A)  increasing assets and decreasing costs. 
B)  increasing sales and assets. 
C)  increasing cost of capital and assets. 
D)  decreasing assets and lowering cost of capital.

Question 4

Compute the return on investment (rounded to nearest percent) for the Tim Tom investment center as shown below. $\begin{array}{ll}
&\text { Tim Tom Subsidiary }\
\text { Total sales } & \$ 1,600 \
\text { Operating income } & \$ 180 \
\text { Average assets invested } & \$ 900 \
\text { Profit margin } & ? \
\text { Asset turnover } & ? \
\text { ROI } & ?
\end{array}$

Accepted Answer

A)  20% 
B)  17% 
C)  14% 
D)  11% 
A)  20% 
B)  17% 
C)  14% 
D)  11%

Question 5

ROI, residual income, and economic value added all represent performance measures that can be utilized to determine investment center performance.

Accepted Answer

A) True 
 B)False

Question 6

The alignment of an organization's strategy with all the perspectives of the balanced scorecard results in performance objectives that benefit all stakeholders.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Standard costing would most often require which type of performance evaluation?

Accepted Answer

A)  Flexible budgeting 
B)  Zero-based budgeting 
C)  Variable costing 
D)  Any of these choices 
A)  Flexible budgeting 
B)  Zero-based budgeting 
C)  Variable costing 
D)  Any of these choices

Question 9

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 were the actual sales?

Accepted Answer

A)  $180 
B)  $200 
C)  $220 
D)  $240 
A)  $180 
B)  $200 
C)  $220 
D)  $240

Question 10

The equation for economic value added includes pretax operating income as well as current liabilities.

Accepted Answer

A) True 
 B)False

Question 11

As the staff accountant for NYC Investment Center #1, compute the center's EVA, using the following information:
 $\begin{array}{|l|l|}
\hline \text { Pretax Operating income } & \$ 900,000 \
\hline \text { Income taxes } & 270,000 \
\hline \text { Total assets } & 1,500,000 \
\hline \text { Total liabilities } & 1,000,000 \
\hline \text { Longterm liabilities } & 100,000 \
\hline \text { Cost of capital } & 55 \%\
\hline 
\end{array}$

Accepted Answer

EVA = ($900,000 - $2

Question 12

Which of the following represents a basic stakeholder of an organization?

Accepted Answer

A)  The account receivable clerk of the organization 
B)  A vice president of the organization 
C)  A line supervisor of the organization 
D)  All of these choices 
A)  The account receivable clerk of the organization 
B)  A vice president of the organization 
C)  A line supervisor of the organization 
D)  All of these choices

Question 13

When developing performance measures, management must consider a number of different issues besides what to measure and how to measure.

Accepted Answer

A) True 
 B)False

Question 14

The CEO of Buckstars is interested in reviewing the May 20xx performance report for Cost Center 7-11. Prepare a brief performance report for the CEO utilizing the following information for Cost Center 7-11. Line items should be broken out between direct materials, direct labor, variable overhead, and fixed overhead.
 $\begin{array}{|l|c|c|c|}
\hline &\text { Actual Results }& \text { Flexible Budget } & \text { Master Budget } \
\hline \text { Ground coffee } & \$ 1,350 & \$ 1,200 & \$ 1,270 \
\hline \text { Flavored syrups } & 2,300 & 2,320 & 3,000 \
\hline \text { Milk } & 350 & 300 & 950 \
\hline \text { Servers wages } & 3,500 & 3,800 & 3,600 \
\hline \text { Stppervisor's salary } & 5,000 & 5,000 & 5,000 \
\hline \text { Espressso machine repair } & 50 & 120 & 150 \
\hline
\end{array}$

Accepted Answer

None

Question 15

Awards are often used to encourage

Accepted Answer

A)  intermediate performance. 
B)  short-term performance. 
C)  long-term performance. 
D)  both short-term and long-term performance. 
A)  intermediate performance. 
B)  short-term performance. 
C)  long-term performance. 
D)  both short-term and long-term performance.

Question 16

Which of the following represents the number of sales dollars generated by each dollar invested in assets?

Accepted Answer

A)  Asset turnover 
B)  Assets invested 
C)  Profit margin 
D)  Operating income 
A)  Asset turnover 
B)  Assets invested 
C)  Profit margin 
D)  Operating income

Many organizations utilize responsibility accounting

In evaluating investment center performance, ROI proves to be such a comprehensive performance measure that other performance measures are rarely needed.

A manager can improve EVA by

Compute the return on investment (rounded to nearest percent) for the Tim Tom investment center as shown below. Tim Tom Subsidiary Total sales \ 1,600 Operating income \ 180 Average assets invested \ 900 Profit margin ? Asset turnover ? ROI ?

ROI, residual income, and economic value added all represent performance measures that can be utilized to determine investment center performance.

The alignment of an organization's strategy with all the perspectives of the balanced scorecard results in performance objectives that benefit all stakeholders.

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

Standard costing would most often require which type of performance evaluation?

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 were the actual sales?

The equation for economic value added includes pretax operating income as well as current liabilities.

As the staff accountant for NYC Investment Center #1, compute the center's EVA, using the following information: Pretax Operating income \ 900,000 Income taxes 270,000 Total assets 1,500,000 Total liabilities 1,000,000 Longterm liabilities 100,000 Cost of capital 55\%

Which of the following represents a basic stakeholder of an organization?

When developing performance measures, management must consider a number of different issues besides what to measure and how to measure.

Awards are often used to encourage

Which of the following represents the number of sales dollars generated by each dollar invested in assets?

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

Many organizations utilize responsibility accounting

In evaluating investment center performance, ROI proves to be such a comprehensive performance measure that other performance measures are rarely needed.

A manager can improve EVA by

Compute the return on investment (rounded to nearest percent) for the Tim Tom investment center as shown below. Tim Tom Subsidiary Total sales \ 1,600 Operating income \ 180 Average assets invested \ 900 Profit margin ? Asset turnover ? ROI ?

ROI, residual income, and economic value added all represent performance measures that can be utilized to determine investment center performance.

The alignment of an organization's strategy with all the perspectives of the balanced scorecard results in performance objectives that benefit all stakeholders.

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

Standard costing would most often require which type of performance evaluation?

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 were the actual sales?

The equation for economic value added includes pretax operating income as well as current liabilities.

As the staff accountant for NYC Investment Center #1, compute the center's EVA, using the following information: Pretax Operating income \ 900,000 Income taxes 270,000 Total assets 1,500,000 Total liabilities 1,000,000 Longterm liabilities 100,000 Cost of capital 55\%

Which of the following represents a basic stakeholder of an organization?

When developing performance measures, management must consider a number of different issues besides what to measure and how to measure.

Awards are often used to encourage

Which of the following represents the number of sales dollars generated by each dollar invested in assets?

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