Question 1

Which of the following is/are an intrinsic reward?

Accepted Answer

A)  Share options 
B)  Job satisfaction 
C)  Promotion 
D)  Share options AND job satisfaction 
A)  Share options 
B)  Job satisfaction 
C)  Promotion 
D)  Share options AND job satisfaction

Question 2

Which of the following statements about developing reward system is incorrect?

Accepted Answer

A)  The key benefit of a profit sharing plan is to encourage employees to think like owners. 
B)  The key benefit of gain sharing plan is to introduce equity, ensuring the employees who contribute to the business can get a share of the gains. 
C)  The key benefit of an employee share plan is to reduce free-riding problems. 
D)  The key benefit of an individual-based incentive system is to highlight improved expectancy and instrumentality. 
A)  The key benefit of a profit sharing plan is to encourage employees to think like owners. 
B)  The key benefit of gain sharing plan is to introduce equity, ensuring the employees who contribute to the business can get a share of the gains. 
C)  The key benefit of an employee share plan is to reduce free-riding problems. 
D)  The key benefit of an individual-based incentive system is to highlight improved expectancy and instrumentality.

Question 3

Which of the following statements is false?

Accepted Answer

A)  Tying rewards to a profit-based measure can provide an incentive for managers to manipulate accounting results. 
B)  Pay systems can be used at all levels of the organisation. 
C)  Pay systems focus on long-term results. 
D)  A pay system can include both cash and non-cash rewards. 
A)  Tying rewards to a profit-based measure can provide an incentive for managers to manipulate accounting results. 
B)  Pay systems can be used at all levels of the organisation. 
C)  Pay systems focus on long-term results. 
D)  A pay system can include both cash and non-cash rewards.

Question 4

Individual reward schemes have which of the following advantages?
i. They relate to individual effort.
ii. They reward only good performers.
iii. They discourage dysfunctional competition between individuals.

Accepted Answer

A)  i and ii 
B)  i and iii 
C)  ii and iii 
D)  None of the given answers 
A)  i and ii 
B)  i and iii 
C)  ii and iii 
D)  None of the given answers

Question 5

Which of the following may be implemented as targets for a group or company-wide performance reward scheme?
i. Employee absenteeism
ii. Lost-time accidents
iii. Customer satisfaction

Accepted Answer

A)  i and ii 
B)  ii and iii 
C)  i and iii 
D)  All of the given answers 
A)  i and ii 
B)  ii and iii 
C)  i and iii 
D)  All of the given answers

Question 6

Which of the following statements is/are correct when describing expectancy theory?
i. The preference that an employee has for a particular reward is called valence.
ii. Expectancy is the likelihood of achieving the performance necessary to earn the reward.
iii. An individual's perception that the effort put into a task will lead to a specific reward outcome is fundamental to expectancy theory.

Accepted Answer

A)  i and ii 
B)  ii and iii 
C)  i and iii 
D)  All of the given answers 
A)  i and ii 
B)  ii and iii 
C)  i and iii 
D)  All of the given answers

Question 7

The following information is available for Jittie Ltd:  
The WACC for Jittie Ltd is:

Accepted Answer

A)  7.6% 
B)  9.25% 
C)  10.9% 
D)  9.5% 
A)  7.6% 
B)  9.25% 
C)  10.9% 
D)  9.5%

Question 8

The northern division of Aussie Estates has reported a profit of $4 million. Divisional invested capital is $2.5 million and the imputed interest rate is 12 per cent. What is the residual income?

Accepted Answer

A)  $180 000 
B)  $1.78 million 
C)  $2.15 million 
D)  $3 700 000 
A)  $180 000 
B)  $1.78 million 
C)  $2.15 million 
D)  $3 700 000

Question 9

Which of the following gives a more accurate calculation of return on investment and residual income?

Accepted Answer

A)  Total capital invested 
B)  Total assets 
C)  Average invested capital 
D)  Average cost of capital 
A)  Total capital invested 
B)  Total assets 
C)  Average invested capital 
D)  Average cost of capital

Question 10

The imputed interest rate is the firm's required rate of return.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is used in the calculation of both return on investment and residual income?

Accepted Answer

A)  Total shareholders' equity 
B)  Retained earnings 
C)  Invested capital 
D)  Cost of capital 
A)  Total shareholders' equity 
B)  Retained earnings 
C)  Invested capital 
D)  Cost of capital

Question 12

The return on investment of a division will increase if the division is able to:

Accepted Answer

A)  increase return on sales and increase investment turnover. 
B)  increase return on sales or increase investment turnover. 
C)  increase sales revenue and decrease asset turnover. 
D)  increase return on sales and/or increase investment turnover. 
A)  increase return on sales and increase investment turnover. 
B)  increase return on sales or increase investment turnover. 
C)  increase sales revenue and decrease asset turnover. 
D)  increase return on sales and/or increase investment turnover.

Question 13

Jasmine Dimm is a call centre manager for Tostra, a mobile phone company. Call centre operators at her call centre are responsible for answering calls from Tostra customers. Some calls are very short, relating to simple enquiries. However, a majority of calls tend to be longer, coming from irate customers complaining about Tostra's services. For these calls, customers are often very emotional and sometimes even abusive. The call centre operators are only responsible for documenting the complaints and are generally unable to solve the problems for the customers.
Jasmine has developed a new reward system for her call centre staff. Under the new system, call centre operators are rewarded with a substantial bonus (20 per cent of annual salary) if they achieve two performance targets: (1) a target set on average call duration; and (2) a target based on 'customer service quality'. While the call centre operators working for Jasmine all agree that these performance targets are reasonable, they are unhappy with Jasmine's overbearing personality. Many operators are also experiencing a lot of stress when dealing with rude customers.
Discuss the limitations of Jasmine's new reward system, using the concept of intrinsic motivation and extrinsic motivation.

Accepted Answer

Extrinsic motivations are derived from o

Question 14

The following information is available for Nettie Ltd:  
The company tax rate is 30 per cent. WACC is:

Accepted Answer

A)  11.2% 
B)  10% 
C)  7.8% 
D)  9.5% 
A)  11.2% 
B)  10% 
C)  7.8% 
D)  9.5%

Question 15

Which of the following measures of performance is based, in part, on weighted average cost of capital?

Accepted Answer

A)  Return on investment 
B)  Capital turnover 
C)  Return on sales 
D)  Economic value added 
A)  Return on investment 
B)  Capital turnover 
C)  Return on sales 
D)  Economic value added

Question 16

Which of the following is/are, according to Herzberg, hygiene factors?

Accepted Answer

A)  Recognition 
B)  Working conditions 
C)  Relationships with colleagues 
D)  Working conditions AND relationships with colleagues 
A)  Recognition 
B)  Working conditions 
C)  Relationships with colleagues 
D)  Working conditions AND relationships with colleagues

Question 17

Which of the following is an example of an intrinsic reward?

Accepted Answer

A)  Cash bonus 
B)  Personal satisfaction 
C)  Larger office 
D)  Certificate of merit 
A)  Cash bonus 
B)  Personal satisfaction 
C)  Larger office 
D)  Certificate of merit

Question 18

Which of the following would be considered an advantage of a group scheme?

Accepted Answer

A)  Equity among employees 
B)  Rewarding only good performers 
C)  Competitiveness between employees 
D)  Individual identification 
A)  Equity among employees 
B)  Rewarding only good performers 
C)  Competitiveness between employees 
D)  Individual identification

Question 19

Richard's Division of Richard and Sons has the following data related to a particular period:  
Calculate the investment turnover (rounded) for the period.

Accepted Answer

A)  0.37 times 
B)  11 times 
C)  0.11 times 
D)  2.7 times 
A)  0.37 times 
B)  11 times 
C)  0.11 times 
D)  2.7 times

Question 20

Joy Home Fashions reported a return on investment during the year of 6 per cent and a profit margin of 12 per cent. What was the investment turnover for the year?

Accepted Answer

A)  18% 
B)  50% 
C)  72% 
D)  20% 
A)  18% 
B)  50% 
C)  72% 
D)  20%

Which of the following is/are an intrinsic reward?

Which of the following statements about developing reward system is incorrect?

Which of the following statements is false?

Individual reward schemes have which of the following advantages? i. They relate to individual effort. ii. They reward only good performers. iii. They discourage dysfunctional competition between individuals.

Which of the following may be implemented as targets for a group or company-wide performance reward scheme? i. Employee absenteeism ii. Lost-time accidents iii. Customer satisfaction

The following information is available for Jittie Ltd: The WACC for Jittie Ltd is:

The northern division of Aussie Estates has reported a profit of $4 million. Divisional invested capital is $2.5 million and the imputed interest rate is 12 per cent. What is the residual income?

Which of the following gives a more accurate calculation of return on investment and residual income?

The imputed interest rate is the firm's required rate of return.

Which of the following is used in the calculation of both return on investment and residual income?

The return on investment of a division will increase if the division is able to:

The following information is available for Nettie Ltd: The company tax rate is 30 per cent. WACC is:

Which of the following measures of performance is based, in part, on weighted average cost of capital?

Which of the following is/are, according to Herzberg, hygiene factors?

Which of the following is an example of an intrinsic reward?

Which of the following would be considered an advantage of a group scheme?

Richard's Division of Richard and Sons has the following data related to a particular period: Calculate the investment turnover (rounded) for the period.

Joy Home Fashions reported a return on investment during the year of 6 per cent and a profit margin of 12 per cent. What was the investment turnover for the year?

Management Accounting: Information for Creating Value and Managing Resources

Management Accounting: Cost Terms and Concepts

Cost Behaviour, Cost Drivers and Cost Estimation

Product Costing Systems

Process Costing and Operation Costing

Service Costing

A Closer Look at Overhead Costs

Activity-Based Costing

Budgeting Systems

Standard Costs for Control: Direct Material and Direct Labour

Standard Costs for Control: Flexible Budgets and Manufacturing Overhead

Managing and Reporting Performance

Strategic Performance Measurement Systems

Managing Suppliers and Customers

Managing Costs and Quality

Sustainability and Management Accounting

Cost Volume Profit Analysis

Information for Decisions: Relevant Costs and Benefits

Pricing and Product Mix Decisions

Information for Capital Expenditure Decisions

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Exam 13: Financial Performance Measures and Incentive Schemes

Which of the following is/are an intrinsic reward?

Which of the following statements about developing reward system is incorrect?

Which of the following statements is false?

Individual reward schemes have which of the following advantages? i. They relate to individual effort. ii. They reward only good performers. iii. They discourage dysfunctional competition between individuals.

Which of the following may be implemented as targets for a group or company-wide performance reward scheme? i. Employee absenteeism ii. Lost-time accidents iii. Customer satisfaction

The following information is available for Jittie Ltd: The WACC for Jittie Ltd is:

The northern division of Aussie Estates has reported a profit of $4 million. Divisional invested capital is $2.5 million and the imputed interest rate is 12 per cent. What is the residual income?

Which of the following gives a more accurate calculation of return on investment and residual income?

The imputed interest rate is the firm's required rate of return.

Which of the following is used in the calculation of both return on investment and residual income?

The return on investment of a division will increase if the division is able to:

The following information is available for Nettie Ltd: The company tax rate is 30 per cent. WACC is:

Which of the following measures of performance is based, in part, on weighted average cost of capital?

Which of the following is/are, according to Herzberg, hygiene factors?

Which of the following is an example of an intrinsic reward?

Which of the following would be considered an advantage of a group scheme?

Richard's Division of Richard and Sons has the following data related to a particular period: Calculate the investment turnover (rounded) for the period.

Joy Home Fashions reported a return on investment during the year of 6 per cent and a profit margin of 12 per cent. What was the investment turnover for the year?

Management Accounting: Information for Creating Value and Managing Resources

Management Accounting: Cost Terms and Concepts

Cost Behaviour, Cost Drivers and Cost Estimation

Product Costing Systems

Process Costing and Operation Costing

Service Costing

A Closer Look at Overhead Costs

Activity-Based Costing

Budgeting Systems

Standard Costs for Control: Direct Material and Direct Labour

Standard Costs for Control: Flexible Budgets and Manufacturing Overhead

Managing and Reporting Performance

Strategic Performance Measurement Systems

Managing Suppliers and Customers

Managing Costs and Quality

Sustainability and Management Accounting

Cost Volume Profit Analysis

Information for Decisions: Relevant Costs and Benefits

Pricing and Product Mix Decisions

Information for Capital Expenditure Decisions

Filters