Exam 11: Decentralization, Performance Evaluation, and the Balanced Scorecard

Bauer Enterprises Ltd. has two product lines: B-40 and B-100. Revenue and cost information for each of the product lines for 2011 are as follows: In 2011, Bauer had common fixed expenses of $100,000, and the company produced and sold 14,500 units of B-40 and 11,000 units of B-100. Required: Prepare a segmented income statement with a column for each product line and the total company.

When a few individuals at the top of an organization retain decision-making authority, the organization is referred to as a(n):

Sanford Products Inc. produces a variety of plastic products which it sells to retail stores throughout the country. The following data is available for the year for one of the products: Required:

List the four categories of quality costs and one example of each.

Which of the following statements about kaizen is false?

Which of the following statements regarding the structure of organizations is false?

The manager of a local retail store tells you that, "An unprofitable segment should always close." Do you agree or disagree with this statement and why?

Pennington Products Pennington Products has two product lines: R-100 and R-200. Revenue and cost information for each of the product lines are as follows: Pennington has common fixed expenses of $380,000 per year. Last year, the company produced and sold 35,000 units of R-100 and 25,000 units of R-200. Refer to the Pennington Products information above. What is the segment margin ratio of the R-200 product line?

Which of the following questions would the financial perspective of the balanced scorecard attempt to answer?

Which of the following is an advantage of decentralization?

Describe the customer perspective of the balanced scorecard and provide an example of a critical success factor for this perspective.

Which of the following will least likely be an indicator of success within the financial perspective of the balanced scorecard?

Which perspective links the critical success factors of the other perspectives and ensures an environment that supports and allows the objectives of the other perspectives to be achieved?

In general, as the manufacturing cycle time decreases, throughput will:

Which of the following questions would the customer perspective of the balanced scorecard attempt to answer?

Return on investment (ROI) is a measure of performance under which perspective of the balanced scorecard?

Which two items are typically omitted from "net operating income" for return on investment (ROI) purposes. Why are these two items omitted?

The manager of a local department store, Nelda Smith, has just been informed that she will start being evaluated on the basis of her segment's ROI in relation to the ROI values of other department stores owned by her employer. Give three ways she can increase her segment's ROI?

Vance Inc. requires all of its divisions to maintain a return on investment (ROI) of at least 45%. The manager of one of the divisions expects the division's net operating income to be $400,000 and its sales to be $2,000,000. Required: Calculate the division's required average operating assets in order to achieve the minimum ROI.

The manager of a revenue center has control over: