Acc 201 chapter 11

Which of the following evaluation measures are used for investment center managers only- not for cost or profit center managers?

-residual income -return on investment (ROI)

A manufacturing cycle efficiency of 40% means that:

-the typical order is being worked on 40% of the time -value-added activities are being performed 40% of the time

Given a margin of 12%, sales of $150,000 and average operating assets of $90,000, the ROI is:

20% Work: 12%*$150,000/$90,000

Operating assets include:

Equipment, inventory, and accounts receivable

4 groups of performance measures that are typically used in the balanced scorecard approach.

Financial, customer, internal business processes, and learning and growth.

Return on investment=

Net operating income/ average operating assets

An integrated set of performance measures that are derived from the company's strategy is:

a balanced scorecard

Performance measures should be reported:

as often as needed

The manager of a(n) _____ center does not have control over revenue or the use of investment funds.

cost

Service departments, such as the accounting department, are generally considered ____ centers, while sales offices are often considered ____ centers.

cost; profit

Non financial (operating) performance measures:

help identify what drives organizational performance

The manager of a(n) ____ center has control over costs, revenue, and investments in operating assets.

investment

ROI is a method used to evaluate:

investment centers, but not cost or profit centers

EBIT is another term for:

net operating income

Residual income=

net operating income- (average operating assets * minimum rate of return)

A MCE of less than 1 indicates:

non-value added time is present

Comparing actual net income to budgeted net income is often done to evaluate the manager of a(n) _____ center.

profit

Components of throughput time include:

queue time, process time, and inspection time

Delivery cycle time

the elapsed time from when a customer order is received until the finished goods are shipped

The manufacturing cycle efficiency is computed by relating the value-added time to the _____ time.

throughput

Delivery cycle time=

wait time + throughput time