Exam 12: Fundamentals of Management Control Systems

It is possible for performance evaluation systems and/or management control systems to contribute to unethical or fraudulent behavior.Systems do not guarantee ethical behavior.

Properly developed and implemented management control systems influence subordinates to act in the organization's best interest.A properly designed system will promote goal congruence.

The Copy Department in the College of Business at State University provides photocopying service for both the Marketing and Economics Department.The following budget has been prepared for the year. If the Copy Department uses a dual rate for allocating its costs based on usage,how much cost will be allocated to the Economics Department?

Properly designed management control systems can totally eliminate the inherent conflict between individual behavior and organizational goals.Conflict cannot be totally eliminated.

The following is a summarized income statement for Royal Manor Co.'s profit center 12608 for April: Which of the following amounts is most likely subject to the control of the profit center's manager?

Which of the following departments would not be a cost center?

Controllable revenue is included in a performance report of a:

Fenway Telcom has three divisions,commercial,retail,and consumer,that share the common costs of the company's computer server network.The annual common costs are $2,400,000.You have been provided with the following information for the upcoming year: The cost accountant determined $1,700,000 of the server network's costs were fixed and should be allocated based on the number of connections.The remaining costs should be allocated based on the time on the network.What is total server network costs allocated to the Consumer Division,assuming the company uses dual-rates to allocate common costs?

It is important to not consider an organization's compensation and reward system when designing its performance evaluation system.It is important to consider the system.

Fenway Telcom has three divisions,commercial,retail,and consumer,that share the common costs of the company's computer server network.The annual common costs are $2,400,000.You have been provided with the following information for the upcoming year: What is the allocation rate for the upcoming year,assuming Fenway Telcom uses the single-rate method and allocates common costs based on the time on the network?

When managers are held responsible for costs and the input-output relationship is well specified,a(n)___________ is established.

Controllable revenue is included in a performance report of a:

Controllable revenue is included in a performance report of a:

The Document Creation Center (DCC)for Alegis Corp.provides photocopying and document services for three departments in the St.Paul office.The following budget has been prepared for the year. If DCC uses a dual-rate for allocating its costs,how much cost will be allocated to the Management Department,assuming the Management Department actually made 2,100,000 copies during the year?

Relative performance evaluations (RPE)are not designed to:

An operating unit that is responsible for only costs is commonly referred to as a(n):

Managers in a cost center are held responsible for both the costs and volumes of inputs used to produce a product or provide a service.The manager does not have control over the price of the output,or authority over it.

Decentralized organizations can delegate authority and still maintain control and monitor managers' performance by designing appropriate management control systems.Which of the following responsibility centers would be evaluated similar to an independent business?

Which of the following statements is (are)true regarding managerial decisions? (A)The design and use of management control systems affects how an individual makes and implements decisions.(B)Rational managers will always make decisions that are in the best interest of the organization employing them.

Fenway Telcom has three divisions,commercial,retail,and consumer,that share the common costs of the company's computer server network.The annual common costs are $2,400,000.You have been provided with the following information for the upcoming year: Fenway Telcom uses the single rate method and allocates common costs based on the number of connections.What is the total computer server network cost allocated to the Commercial Division?