Accounting Exam #3

The level of employee satisfaction is a key performance indicator of the ____

Learning and growth perspective of the balance scorecard

Which of the following is the correct formula for calculating residual income?

Operating income - minimum acceptable operating income

In a ______, the manager is responsible for generating revenues and controlling costs

Profit center

Importance & benefits of budgeting

- planning - coordinating and communication - Benchmarking - Budgeting procedures

Investment Center

1) generate revenues 2) managing invested capital

Profit center

1) generates profits 2) controls costs

The 4 Centers

1. Profit center 2. Revenue Center 3. Cost Center 4. Investment

Decentralization

A company that is divided into business segments with segment managers making, planning, directing, and controlling decisions for their segments

Residual Income

A measure of profitability and efficiency computed as actual operating income less a specified minimum acceptable operating income.

Return on Investment

A measure of profitability and efficiency. Operating income / Average total assets.

Cost Center

Control costs

The payroll department of a manufacturing company is most likely to be a

Cost Center

The manager of a cost center is responsible for controlling costs and generating revenues of the company

False

The manager of a profit center is responsible for generating revenues and managing the center's invested capital

False

The manager of a revenue center is responsible for generating profits

False

Long-term investments are made by the manager of an investment division for the purpose of

Increasing profits

Select the Balanced Scorecard perspective that helps managers address the question "At what business processes must we excel to meet customer and financial objectives?"

Internal Business

Which of the following would most likely be evaluated using residual income?

Investment center

Which of the following best describes the manager of a profit center?

The manager is responsible for generating revenues and controlling costs

Operational Budget

a short term financial plan used to coordinate the activities needed to achieve the short-term goals of the company

Which of the following is a responsibility that is common to the managers of cost, profit, and investment centers

controlling costs

Which of the following best describes standard costs

costs used as a budget for a single unit of product

A company is analyzing its month0end results by comparing it to both tstatic and flexible budgets. During the previous month, the actual fixed costs were lower than the expected fixed costs as per the static budget. The difference results in a ________

favorable flexible budget variance for fixed costs

Revenue Center

generates revenues

A favorable sales volume variance in sales revenue suggests a

increase in number of actual units sold when compared ot the expected number of units sold

Return on Investment _____

is a measure of a company's profitability and efficiency

Profit

less high traffic areas than revenue e Ex. toys, men's clothes - dont make a ton of money

Common Key Performance indicators used in a Balanced Scorecard that measure customer perspective are _____

percentage of market share and percentage of sales return

Brad turret, one of the managers of a multi national company is responsible for generating revenues and controlling costs in order to increase the operating income of his divison. However, he is not concerned about investment-related decisions. Brad is most likely to be the manager of a

profit center

investment centers

really expensive items

Financial Budget

the budget that includes the cash budget and the budgeted financial statements

Master Budget

the company's planned activities

Benchmarking

the practice of comparing and comparing a company with its prior performance

Revenue

things you walk into and they make money

Which of the following amounts of a flexible budget change with changes in sales volume?

total contribution margin

Management by Exception

when managers on results that are outside the accepted parameters

which of the following will result in an unfavorable direct labor cost variance

when the actual direct labor rate exceeds the standard direct labor rate

Which of the following will result in an unfavorable direct materials efficiency variance?

when the actual quantity of direct materials used per unit exceeds the standard quantity of direct materials allowed per unit