Chapter 19 MC

119 : Six Sigma is based on a five-step methodology referred to as: A : continuous improvement. B : DMAIC. C : kaizen. D : DAID. E : benchmarking.

b

79 : Madison has been assigned to work on the development of a budget that lists planned investments in major assets such as buildings and heavy machinery. Madison is working on a(n) __________ budget. A : cash B : capital C : revenue D : operating E : expense

b

102 : At RWI Distilleries, rules and procedures are used only when necessary. Instead, managers rely on shared goals and values to control employee behavior. RWI uses what type of organizational control? A : Centralized B : Hierarchical C : Decentralized D : Top-down E : Balanced

c

107 : All of the following are total quality management techniques except: A : quality partnering. B : continuous improvement. C : electronic monitoring. D : Six Sigma principles. E : benchmarking.

c

121 : __________ is/are most beneficial when employees have challenging jobs. A : Six Sigma B : Total quality management C : Kaizen D : Quality circles E : Continuous improvement

d

77 : A(n) __________ budget includes anticipated and actual expenses for a responsibility center and for the total organization. A : revenue B : cash C : capital D : expense E : operating

d

106 : Silver n Gold Inc. recently introduced a new control philosophy where all employees have access to the same information that owners have, such as what money is coming in and where it is going. This is an example of which control philosophy? A : Balanced scorecard B : Six Sigma C : Continuous improvement D : Total quality management E : Open-book management

e

115 : Which of the following is a reason why an organization might use benchmarking? A : To assess market demand B : To identify best practices within an industry C : To generate new business ideas D : To increase productivity E : All of these

e

118 : With quality partnering,: A : people from the quality control department are viewed as outsiders. B : quality control is conducted after a product is completed or service delivered, allowing organizations to save money. C : quality is measured against the best in the industry. D : quality control is seen as separate from everyday work. E : none of these.

e

69 : All well-designed control systems involve the use of __________ to determine whether performance meets established standards. A : opinions B : advice C : consultants D : benchmarks E : feedback

e

103 : Which of the following allows employees to see for themselves the financial condition of the company? A : Open-book management B : An economic value-added system C : Activity-based costing D : An inappropriate control system E : A market value-added system

a

113 : Quality circles are based on the assumption(s) that: A : the people who do the job know it better than anyone else. B : quality can be increased by increasing the size of the organization. C : quality can be increased by talking more about it. D : the more employees talk, the more satisfied they will be. E : all of these.

a

123 : __________ standards represent an international consensus of what constitutes effective quality management. A : ISO 9000 B : Six Sigma C : TQM D : Kaizen E : Foreign Economy Index

a

125 : Buildings and equipment that are long term in nature would be included under __________ on an organizations __________. A : fixed assets; balance sheet B : current assets; balance sheet C : long-term debt; income statement D : owners equity; income statement E : owners equity; balance sheet

a

54 : Ophelia, the new CEO at Odyssey Inc., plans to implement a highly effective systematic process of regulating organizational activities to make them consistent with the expectations that are established by managers within the company. This is referred to as __________ control. A : organizational B : feedback C : budgetary D : systems E : quality

a

55 : __________ is a term that describes technologies that wirelessly transmit data from remote sensors and GPS devices to computers for analysis. A : Telematics B : Networking C : Teletracking D : Telecommunications E : None of these

a

57 : Zachary, a manager at ExecuComp, receives quarterly reports, which track his departments production statistics. However, these reports lack key information regarding reject rates. Which of the following components of the feedback control model needs improvement? A : Measuring actual performance B : Establishing standards of performance C : Analyzing weaknesses and strengths D : Taking corrective action when necessary E : All of these

a

62 : All of the following are major perspectives of the balanced scorecard except: A : competitors. B : customer service. C : the organizations capacity for learning and growth. D : financial performance. E : internal business processes.

a

80 : The __________ budget plans and reports investments in major assets to be depreciated over several years. A : capital B : balance sheet C : cash D : revenue E : expense

a

81 : Ron meets with his companys accountant to discuss the budget of anticipated and actual expenses for each segment of the organization. This involves review of which type of budget? A : Expense B : Revenue C : Cash D : Capital E : Nonfinancial

a

83 : Net income divided by sales is the formula for: A : profit margin on sales. B : the current ratio. C : gross margin. D : the debt ratio. E : return on assets.

a

91 : The conversion ratio is considered to be a(n) __________ ratio. A : activity B : liquidity C : profitability D : leverage E : cash

a

98 : Which of the following is considered a leverage ratio? A : Debt ratio B : Return on assets C : Profit margin on sales D : Conversion ratio E : Inventory turnover

a

100 : At LBK Industries, responsibility for quality control rests with a team of quality control inspectors and supervisors rather than with employees. LBK uses what type of organizational control? A : Matrix B : Hierarchical C : Decentralized D : Bottom-up E : Balanced

b

104 : At FreshFood Corporation, the organizational structure is flat and horizontal. Managers use both intrinsic and extrinsic rewards, and employees are rewarded for team and organizational success as well as their individual performance. FreshFood uses what type of organizational control? A : Bureaucratic B : Decentralized C : Centralized D : Feedback E : None of these

b

108 : Which of the following statements about total quality management (TQM) is true? A : TQM was first implemented in the United States in the 1970s. B : The TQM philosophy focuses on teamwork, increasing customer satisfaction, and lowering costs. C : TQM gives managers total responsibility for achieving quality improvement. D : With TQM, quality control is assigned to specialized departments. E : TQM is based on a hierarchical control philosophy.

b

110 : A quality circle is a group of _____ to _____ volunteer employees. A : 2; 4 B : 6; 12 C : 10; 20 D : 15; 25 E : 30; 50

b

112 : Heather belongs to a group of eight employees at work that meets every other Friday at 1 p.m. to discuss issues and problems in the workplace that affect the quality of their work. This group is an example of: A : a safety group. B : a quality circle. C : an ad-hoc committee. D : a problem team. E : none of these.

b

117 : Which total quality management technique is based on a five-step methodology referred to as DMAIC (Define, Measure, Analyze, Improve, and Control), which provides a structured way for organizations to approach and solve problems? A : Quality circles B : Six Sigma C : Benchmarking D : Balanced scorecard E : Continuous improvement

b

120 : It seems that once a year the managers of Stone Construction, Inc. attempt a major organization intervention, such as management by objectives. They never seem to be satisfied with the performance of Stone Construction and, sure enough, 12 months later, along comes another major intervention. By implementing organizational change in this way, Stone Constructions management may well be violating the principle of: A : benchmarking. B : continuous improvement. C : unity of direction. D : top-down control. E : none of these.

b

129 : Scenario - Katrina AldridgeThe yearly auditing review of Pilgrim Industries is scheduled for next month. Katrina Aldridge is preparing for that audit and is also preparing her budget for the coming year.In planning and budgeting for the next 12 months, Katrina is participating in a budgeting process in which lower-level managers anticipate their departments resource needs and pass them up to top management for approval. This budget process is an example of: A : zero-based budgeting. B : bottom-up budgeting. C : top-down budgeting. D : balance sheet budgeting. E : none of these.

b

130 : Scenario - Katrina AldridgeThe yearly auditing review of Pilgrim Industries is scheduled for next month. Katrina Aldridge is preparing for that audit and is also preparing her budget for the coming year.Katrina has also requested that the financial ratios be calculated and analyzed for her. Which of the following ratios will give her the best information for evaluating liquidity? A : Profit margin on sales B : Current ratio C : Conversion ratio D : Return on assets E : Debt ratio

b

53 : Which of the following is the systematic process through which managers regulate organizational activities to meet planned goals and standards of performance? A : Strategic planning B : Organizational control C : Organizational goal setting D : Strategic regulation E : Organizational leading

b

58 : The goal of open-book management is to: A : infuse quality into every activity in a company through continuous improvement. B : get every employee thinking and acting like a business owner. C : reduce overall costs in an effort to increase organizational profits. D : identify opportunities for quality improvements throughout the work process. E : keep tabs on what employees are doing practically all the time.

b

61 : __________ indicators focus on production and operating statistics. A : Financial performance B : Business process C : Critical success D : Potential for learning and growth E : Performance measurement

b

67 : Focusing on how well resources and human capital are being managed for the companys future refers to which component of the balanced scorecard? A : Customer service B : Potential for learning and growth C : Financial performance D : Internal business processes E : External business processes

b

68 : Use of the balanced scorecard can hinder or decrease organizational performance if it is implemented using a(n): A : performance management orientation. B : performance measurement approach. C : customer orientation. D : learning and growth orientation. E : organizational strategy approach.

b

70 : What is the first step in the feedback control system? A : Establish strategic objectives B : Establish standards of performance C : Take corrective action D : Compare performance to standards E : Measure previous performance

b

71 : CyberChasers Corporation sends a post-purchase questionnaire to all consumers who buy its products. It is interested in gathering data on product quality, customer service orientation, and customer satisfaction. This is an example of a __________ control. A : concurrent B : feedback C : feedforward D : preliminary E : preventive

b

75 : A(n) __________ center is defined as any organizational department or unit under the supervision of a single person who is responsible for its activity. A : independent B : responsibility C : analysis D : control E : budgeting

b

86 : Which of the following is the first step of the benchmarking process? A : Collect B : Plan C : Analyze D : Find E : Improve

b

88 : All of the following are shown on an income statement except: A : cost of goods sold. B : accounts receivable. C : taxes. D : depreciation. E : net income.

b

90 : The __________ ratio indicates an organizations ability to meet its current debt obligations. A : activity B : liquidity C : profitability D : conversion E : growth

b

92 : Which of the following is a ratio that measures the firms internal performance with respect to key activities defined by management? A : A liquidity ratio B : An activity ratio C : Return on assets D : A current ratio E : Profit margin on sales

b

94 : Tammy is a production manager at Eagles Nest, Inc. She is concerned that too much money is being wasted on inventory that is sitting in the warehouse too long. She should calculate: A : the current ratio. B : inventory turnover. C : the conversion ratio. D : return on assets. E : the debt ratio.

b

96 : Which of the following refers to funding activities with borrowed money? A : Return on assets B : Leverage C : Liquidity D : Profitability E : Activity

b

111 : A group of 6 to 12 volunteer employees who meet regularly to discuss and solve problems that affect the quality of their work is a: A : feedforward control group. B : work team. C : quality circle. D : committee. E : problem team.

c

114 : __________ involves assigning dedicated personnel within a particular functional area of the business to identify opportunities for improvement throughout the work process. A : A quality circle B : Benchmarking C : Quality partnering D : Continuous improvement E : Total quality management

c

126 : The conversion ratio is computed as __________ divided by __________. A : net income; total sales B : purchase orders; total sales C : purchase orders; customer inquiries D : net income; gross income E : customer inquiries; purchase orders

c

127 : Electronic monitoring of employees is associated with: A : decentralized control. B : Six sigma. C : hierarchical control. D : open-book management. E : continuous improvement.

c

128 : Scenario - Katrina AldridgeThe yearly auditing review of Pilgrim Industries is scheduled for next month. Katrina Aldridge is preparing for that audit and is also preparing her budget for the coming year.Which of the following budgets will provide Katrina information about planned investments in major assets, such as buildings and heavy machinery? A : Cash budget B : Revenue budget C : Capital budget D : Expense budget E : Balance sheet budget

c

56 : To evaluate and reward employees effectively for the achievement of standards, managers need clear standards that: A : allow the organization to learn and grow. B : provide monetary compensation to employees that effectively meet them. C : reflect activities that contribute to the organizations overall strategy in a significant way. D : measure individual productivity so weak performers can be phased out. E : all of these.

c

59 : All of the following are key steps of setting up feedback control systems except: A : comparing performance to standards. B : establishing standards. C : getting employee opinions. D : measuring performance. E : making corrections as necessary.

c

63 : Mistletoe Corporation has a detailed set of organizational goals and a management information system that delivers timely and accurate information. Mistletoe still has control problems, however, because its managers refuse to act on the information they receive. Mistletoes control process has flaws in which of the following areas? A : Its performance standards B : Its management information systems C : Its ability to take corrective action when necessary D : Its measurement systems E : None of these

c

65 : Kyles work group consistently exceeds the goals the members set for themselves some months ago. In an attempt to better motivate the group, Kyle thought it would be a good idea to set new goals. This is an example of Kyle exercising control by: A : comparing performance to standards. B : developing adequate measures of performance. C : taking corrective action. D : comparing performance to standards and developing adequate measures of performance only. E : all of these.

c

72 : Which of the following is the basic assumption of hierarchical control? A : People work best when they are fully committed to the organization. B : People are capable of self-discipline and can be trusted. C : People need to be monitored closely. D : People value intrinsic rewards more than extrinsic rewards. E : People generally take initiative and seek responsibility.

c

73 : According to the feedback control model, after establishing standards of performance, the manager should: A : compare performance to standards. B : get the standards approved by the supervisors and subordinates. C : measure actual performance. D : take corrective action. E : provide feedback.

c

76 : __________ control is the process of setting targets for an organizations expenditures, monitoring results and comparing them to the budget, and making changes as needed. A : Quality B : Income C : Budgetary D : Systems E : Supply-chain

c

78 : Which of the following is a financial budget that estimates receipts and expenditures of money on a daily or weekly basis to ensure that an organization has sufficient cash to meet its obligations? A : Capital budget B : Balance sheet budget C : Cash budget D : Revenue budget E : Expense budget

c

84 : Brad is a department manager at Home Theater, Inc. His sole role in the budget process is to implement the budget that is developed for him. This is an example of: A : strategic budgeting. B : operational budgeting. C : top-down budgeting. D : management by objectives. E : bottom-up budgeting.

c

93 : __________ is purchase orders divided by customer inquiries. A : The current ratio B : Inventory turnover C : The conversion ratio D : Profit margin on sales E : Gross margin

c

97 : __________ allows the employee to see how his or her job fits into the big picture and affects the financial future of the organization. A : Activity-based costing B : An economic value-added system C : Open-book management D : A hierarchical control process E : None of these

c

99 : The basic philosophy of control at Nutrients-For-You, Inc. is based on the policies found in the employee handbook, as well as a strict hierarchy of authority. This philosophy is consistent with __________ control. A : clan B : bottom-up C : hierarchical D : culture E : decentralized

c

101 : In organizations that use decentralized control, self-discipline and self-control keep workers performing their jobs up to standard. Which of the following does not contribute to internal standards that provide self-control? A : Empowerment of employees B : Training C : Effective socialization D : Extrinsic rewards E : All of these contribute to internal standards that provide self-control.

d

105 : The balanced scorecard is an effective tool for managing and improving performance, but only if it is: A : used by managers who recognize that relying exclusively on financial measures benefits the organization in the long run. B : implemented using a performance measurement orientation. C : used exclusively by the top levels of the organization. D : clearly linked to a well-defined organizational strategy and goals. E : used in organizations that adopt a hierarchical control process.

d

109 : Charlie, a manager at a textile company, is bothered by a lack in quality of products manufactured by his company. Charlie hopes to infuse quality into the company through continuous improvement by involving everyone who works there. This describes which control philosophy? A : Balanced scorecard B : Six Sigma C : Continuous improvement D : Total quality management E : Open-book management

d

116 : Which of the following is a quality-control approach that emphasizes a disciplined and relentless pursuit of higher quality and lower costs? A : Continuous improvement B : Cycle time C : Quality circles D : Six Sigma E : Benchmarking

d

60 : Which of the following is a comprehensive management control system that balances traditional financial measures with operational measures relating to a companys critical success factors? A : Economic value-added system B : Activity-based costing system C : Market value-added system D : Balanced scorecard E : Open-book management system

d

64 : Which of the following is the correct order of the steps in the feedback control model? A : Establish standards of performance; Compare performance to standards; Measure actual performance; Take corrective action B : Compare performance to standards; Measure actual performance; Establish standards of performance; Take corrective action C : Measure actual performance; Establish standards of performance; Compare performance to standards; Take corrective action D : Establish standards of performance; Measure actual performance; Compare performance to standards; Take corrective action E : Establish standards of performance; Establish strategic goals; Compare performance and goals to standards; Take corrective action

d

74 : Tiffany recently discovered that the reject rate for her department has exceeded the standard for performance in this area. What should Tiffany do to exercise effective control? A : She should order more training for her workforce. B : She should contact the maintenance department and have them come fix her machinery. C : She should suspend the low-performing workers in her department. D : She should investigate and discover the cause of the problem. E : None of these

d

82 : Stella, a systems manager for a large technology company, would like to get an understanding of her companys financial position with respect to assets and liabilities at the end of the fiscal year. Which of the following should she refer to? A : Income statement B : Activity ratio C : Balanced scorecard D : Balance sheet E : None of these

d

85 : Pauline is an area manager at Ironman Gym. She anticipates her areas needs and formulates a proposed budget every quarter. She then sends this proposal to her manager. This is an example of __________ budgeting. A : top-down B : strategic C : revenue D : bottom-up E : operational

d

89 : __________ is/are to the difference between assets and liabilities and is/are the companys net worth in stock and retained earnings. A : Assets B : Current debt C : Net profit D : Owners equity E : Liabilities

d

95 : Net income divided by sales is the correct formula for calculating: A : return on assets. B : the current ratio. C : the quick ratio. D : profit margin on sales. E : gross margin.

d

122 : Contingency factors that can influence the success of a total quality management (TQM) program in a positive way include all of the following except: A : tasks make great skill demands on employees. B : TQM serves to enrich jobs and motivate employees. C : problem-solving skills are improved for all employees. D : participation and teamwork are used to tackle significant problems. E : managers wait for big, dramatic innovations.

e

124 : A contingency factor that can influence the success of a total quality management (TQM) program in a negative way is that: A : continuous improvement is a way of life. B : TQM serves to enrich jobs and motivate employees. C : problem-solving skills are improved for all employees. D : participation and teamwork are used to tackle significant problems. E : union leaders are left out of quality control discussions.

e

66 : In the process of implementing the balanced scorecard approach at his company, operations manager Seth Howard wonders whether internal activities and processes add value for customers and shareholders. This involves which component of the balanced scorecard? A : Customers B : Learning and growth C : Financials D : External business processes E : Internal business processes

e

87 : The firms financial position with respect to assets and liabilities at a specific point in time is shown by its: A : activity ratio. B : profitability ratio. C : income statement. D : liquidity ratio. E : balance sheet.

e