Exam 12: Fundamentals of Management Control Systems

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 Software Development Department,assuming the Software Development Department actually made 1,780,000 copies during the year?

Internal controls include all of the following except:

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 Training Department,assuming the Training Department actually made 3,250,000 copies during the year?

Which one of the following firms is likely to experience dysfunctional motivation on the part of its managers due to its allocation methods? (CMA adapted)

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 based on usage,how much cost will be allocated to the Training Department?

An operating unit of an organization is called a cost center if it is responsible:

One advantage of centralization is better use of top management's time on strategic decisions.In a centralized system,top management is required to make many operating decisions,so there is less time for strategic decision making.

Decentralizationrefers to the delegation of decision-making authority to:

Boxes-2-Go has two divisions,large and small,that share the common costs of the company's communications network.The annual common costs are $4,500,000.You have been provided with the following information for the upcoming year: The cost accountant determined $2,700,000 of the communication network's costs were fixed and should be allocated based on the number of calls.The remaining costs should be allocated based on the time on the network.What is total communication network costs allocated to the Small Box Division,assuming the company uses dual-rates to allocate common costs?

Decentralization is the delegation of the authority to make decisions in the organization's name to subordinates.This is the definition of decentralization.

The controllability concept states that managers should be held responsible for:

Properly designed management control systems will eliminate fraudulent behavior by maximizing goal congruence within the organization.Fraud cannot be eliminated by control systems,it can only be reduced.

A manager makes a decision that is beneficial for a specific investment center and for the entire organization.From the organization's perspective,this decision results in:

Which of the following statements is false?

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,how much cost will be allocated to the Economics Department,assuming the Economics Department actually made 2,100,000 copies during the year?

Which of the following is not one of the objectives of cost allocation?

The Sarbanes-Oxley Act of 2002 requires that management of publicly traded companies:

Boxes-2-Go has two divisions,large and small,that share the common costs of the company's communications network.The annual common costs are $4,500,000.You have been provided with the following information for the upcoming year: What is the allocation rate for the upcoming year,assuming Boxes-2-Go uses the single-rate method and allocates common costs based on the number of calls?

An operating unit of an organization is called a profit center if it is responsible:

Delegated decision authority is the specification of what decisions a subordinate can make in the organization.Authority defines what a person can and cannot do.