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