Deck 19: Managerial and Quality Control

Question 1

Effectively controlling an organization requires information about product standards and actual products, as well as actions to correct any deviations from the standards.

Answer 1

False

Question 2

The balance sheet shows the firm's financial position with respect to expenses and credits at a specific point in time.

Answer 2

False

Question 3

Frequently calculated ratios typically pertain to activity, passivity, and profitability.

Answer 3

False

Question 4

Feedback control focuses on the quantity of an end product or service.

Question 5

A process in which lower level managers anticipate their department's resource needs and pass them to top management for approval is called top-down budgeting.

Question 6

A standard for performance is included in an organization's overall strategic plan to compare organizational activities against.

Question 7

To do nothing if performance is adequate or to take corrective action if performance is inadequate is the final step of the feedback control model.

Question 8

The fundamental unit of analysis for a budget control system is called a responsibility center.

Question 9

Managers, in most companies, rely exclusively on quantitative measures to measure actual performance.

Question 10

A process in which lower level managers anticipate their department's resource needs and pass them up to top management for approval is called bottom-up budgeting.

Question 11

A budget that plans and reports investments in major assets to be depreciated over several years is called a balance sheet budget.

Question 12

The three types of control are formally called feedforward, concurrent, and feedback.

Question 13

The level of funds flowing through the organization and the nature of cash disbursements is shown through the capital budget.

Question 14

An expense budget lists forecasted and actual revenues of the organization.

Question 15

Liabilities are the firm's debts, both current and long-term.

Question 16

The income statement shows revenues coming into the organization from all sources and subtracts all expenses.

Question 17

Organizational control is the systematic process of regulating organizational activities to make them consistent with the expectations in plans, targets, and standards of performance.

Question 18

Concurrent control focuses on the organization's outputs.

Question 19

The company's ability to meet its current debt obligations and a measurement of the firm's margin of safety is shown by liquidity ratio.

Question 20

Feedforward control is sometimes called preliminary or preventive quality control.

Question 21

ABC is a control system that identifies the various activities needed to provide a product and allocates costs accordingly.

Question 22

Technology and quality control departments are typically associated with bureaucratic control.

Question 23

Decentralized control represents the absence of control because visible rules, supervision, and procedures are absent.

Question 24

Economic value added system identifies various activities needed to provide a product and determines the cost of each of those activities.

Question 25

Open-book management ties employee rewards to the company's overall success.

Question 26

Decentralized control is the use of cultural values, traditions, shared beliefs and trust to increase compliance with goals.

Question 27

A balanced scorecard contains four major perspectives: customer service, external business processes, financial performances, and the organization's capacity for learning and growth.

Question 28

The age-old practice of allowing the artisan to sign his name to the finished product is called benchmarking.

Question 29

Very high expectations from senior management and a desire to share authority by middle managers are two of the positive factors leading to success of TQM.

Question 30

ISO certification is certification based on a set of international standards for quality management, setting uniform guidelines for processes to ensure that products conform to customer requirements.

Question 31

A quality team is a group of six to twelve volunteer employees who meet regularly to discuss and solve problems affecting their common work activities.

Question 32

Reduced cycle time is one of the common techniques of TQM, and refers to the ability of TQM to shorten the time required to receive inventory after placing an order for it.

Question 33

An activity ratio that is the percentage returned to investors on total assets is return on total assets (ROA).

Question 34

Inventory turnover is an activity ratio and measures how many times the inventory is turned over to meet the total sales figure.

Question 35

According to Unlocking Innovative Solutions Through PEOPLE in Chapter 19, a Qwest call center in Idaho was turned around by the implementation of control through fear and intimidation.

Question 36

Market value-added systems measure the stock market's estimate of the value of the company's past and projected capital investment projects.

Question 37

__________ is the systematic process through which managers regulate organizational activities.

A) Strategic planning
B) Organizational control
C) Organizational goal setting
D) Strategic regulation
E) Organizational leading

Question 38

The implementation of a large number of small, incremental improvements in all areas of the organization and an ongoing basis is called continuous improvement.

Question 39

The continuous process of measuring products, services, and practices against the toughest competitors or the industry leaders is called outsourcing.

Question 40

Corporate governance refers to the system of governing an organization so that the interests of corporate owners are protected.

Question 41

__________ control monitors ongoing employee activities.

A) Concurrent
B) Feedback
C) Feedforward
D) Strategic
E) All of these

Question 42

When Flowers Unlimited uses hand-held computers to monitor daily sales activity, it is an example of a

A) feedback control.
B) feedforward control.
C) concurrent control.
D) technological control.
E) hand-held control.

Question 43

__________ is the first step in the control system.

A) Establishing strategic objectives
B) Establishing standards of performance
C) Taking corrective action
D) Comparing performance to standard
E) Measuring previous performance

Question 44

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 necessary corrections.

Question 45

__________ controls deals with active anticipation of problems and their timely solution.

A) Feedforward control
B) Concurrent control
C) Feedback control
D) Post-action control
E) Output control

Question 46

All of the following are types of control EXCEPT

A) preliminary control.
B) subjective control.
C) post-action control.
D) concurrent control.
E) all of these are types of control described in the text

Question 47

Direct supervision is most effective for which type of control?

A) Feedforward
B) Concurrent
C) Feedback
D) Preliminary
E) Post-action

Question 48

__________ control focuses on the organization's outputs.

A) Feedback
B) Output
C) Post-action
D) All of these
E) Feedback and output only

Question 49

According to MANAGER'S SHOPTALK in Chapter 19, guidelines for creating an effective but fair "acceptable use policy" for workplace Internet use includes all of the following EXCEPT:

A) make sure employees understand that they have no legal right to privacy in the workplace
B) create a written Internet policy
C) describe the disciplinary process
D) review the policy at regular intervals
E) all of these are included in the guidelines

Question 50

Feedback control is sometimes called

A) output control.
B) concurrent control.
C) preventive quality control.
D) preliminary control.
E) precaution control.

Question 51

After establishing standards of performance, according to the control model, 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.

Question 52

Xavier likes to roam through his department to make sure everyone is staying on task. This is an example of a

A) feedback control.
B) concurrent control.
C) feedforward control.
D) behavioral control.
E) non-trusting control.

Question 53

Which of the following is an example of a feedforward control?

A) A manager observing a new employee to see how he/she is performing
B) The performance appraisal interview
C) An examination of an employee's work records
D) Criteria used in the hiring process
E) None of these

Question 54

Michelle recently discovered that the reject rate for her department has exceeded the standard for performance in this area. What should Michelle 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 poorer workers in her department.
D) She should investigate and discover the cause of the problem.
E) None of these

Question 55

Preventive quality control is also known as

A) concurrent control.
B) feedback control.
C) output control.
D) preliminary control.
E) subjective control.

Question 56

Marie is a manager at Chris's Candies. On a regular basis Marie and her subordinates set individual and organizational goals. This process is similar to which component of the control model?

A) Taking corrective action when necessary
B) An information system
C) Establishing performance standards
D) Engaging strategic analysis
E) None of these

Question 57

The three types of control are

A) feedforward, concurrent, and feedback.
B) performance, quality, and quantity.
C) quality, performance, and feedback.
D) feedforward, quality, and feedback.
E) feedward, concurrent, and quality.

Question 58

__________ control focuses on human, material, and/or financial resources.

A) Concurrent
B) Feedback
C) Feedforward
D) Organizational
E) All of these

Question 59

Remote Control Corporation sends a post-purchase questionnaire to all consumers who buy their products. They are interested in gathering data on product quality, customer service orientation, and customer satisfaction. This is an example of

A) a concurrent control.
B) a feedback control.
C) a feedforward control.
D) preliminary control.
E) preventive control.

Question 60

James, a manager at CompuTech, receives quarterly reports, which tracks his department's production statistics. However, these reports lack key information regarding reject rates. Which of the following components of the control model need improvement?

A) Measuring actual performance
B) The planning and setting of performance standards
C) SWOT analysis
D) The ability to take corrective action when necessary
E) All of these

Question 61

The __________ plans future investments in major assets to be depreciated over several years.

A) capital budget
B) balance sheet budget
C) cash budget
D) revenue budget
E) profit budget

Question 62

The ability of the organization to meet its current debt obligations is indicated by a(n) __________ ratio.

A) activity
B) liquidity
C) profitability
D) conversion
E) growth

Question 63

The firm's 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.

Question 64

Kurt's work group consistently exceeds the goals the members set for themselves some months ago. In an attempt to better motivate the group, Kurt thought it would be a good idea to set new goals. This is an example of Kurt exercising control by

A) comparing performance to standards.
B) developing adequate measures of performance.
C) taking corrective action.
D) all of these
E) comparing performance to standards and developing adequate measures of performance only.

Question 65

__________ is a ratio that measures the firm's internal performance with respect to key activities defined by management.

A) A liquidity ratio
B) An activity ratio
C) Return on total assets
D) A current ratio
E) Profit margin on sales

Question 66

Melissa has been assigned to work on the development of a budget that plans future investments in major assets such as buildings and heavy machinery. Melissa is working on a(n)

A) cash budget.
B) capital budget.
C) revenue budget.
D) operating budget.
E) expense budget.

Question 67

Joey is a department manager at IronRods.com. 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.

Question 68

In most organizations, managers must rely on quantitative measures and __________ in order to exert effective control.

A) numerical indicators
B) profits
C) their own judgment
D) goal achievement
E) employees' words

Question 69

__________ is a financial budget that estimates cash flows on a daily basis or weekly basis to ensure that the company can meet its obligations.

A) Capital expenditure budget
B) Balance sheet budget
C) Cash budget
D) Revenue budget
E) Profit budget

Question 70

An advantage of the bottom-up budgeting process is

A) its emphasis on bureaucratic control.
B) lower managers are more involved.
C) top managers control the information flow.
D) top managers are often not committed to achieving budget targets.
E) all of these.

Question 71

Your department has absenteeism standards, a way to measure absenteeism, and, based on your investigation, you have concluded that your department has an excessive absenteeism rate. What should your next step be?

A) Set new absenteeism standards
B) Develop new measures of absenteeism
C) Terminate three employees for excessive absenteeism
D) All of these would be good examples of taking corrective action.
E) None of these

Question 72

The __________ is purchase orders divided by customer inquiries.

A) current ratio
B) inventory turnover ratio
C) conversion ratio
D) profit margin on sales
E) none of these

Question 73

Arbor Tree Corporation has a detailed set of organizational goals and management information system that delivers timely and accurate information. Arbor Tree still has control problems, however, because its managers refuse to act on the information they receive. Arbor Tree's 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

Question 74

Juanita is an area manager at Home Theater, Inc. She anticipates her area's needs and formulates a proposed budget every quarter. She then sends this proposal to her manager. This is an example of

A) top-down budgeting.
B) strategic budgeting.
C) revenue budgeting.
D) bottom-up budgeting.
E) none of these.

Question 75

Jena is a production manager at Scooby Snacks. She is concerned that too much money is being wasted on inventory that is sitting in the warehouse too long. She should calculate a(n)

A) current ratio.
B) inventory turnover ratio.
C) conversion ratio.
D) profitability ratio.
E) leverage ratio.

Question 76

Any organizational department or unit under the supervision of a single person who is responsible for its activity is called a(n)

A) independent center.
B) responsibility center.
C) analysis center.
D) control center.
E) budgeting center.

Question 77

__________ refers to funding activities with borrowed money.

A) ROA
B) Leverage
C) Liquidity
D) Profitability
E) Activity

Question 78

Net income divided by sales is the correct formula for calculating

A) return on total assets.
B) a current ratio.
C) a liquidity ratio.
D) profit margin on sales.
E) a corporate evaluation.

Question 79

A(n) __________ includes anticipated and actual expenses for a responsibility center.

A) revenue budget
B) cash budget
C) capital budget
D) expense budget
E) operating budget

Question 80

Bureaucratic control is most consistent with

A) bottom-up budgeting.
B) top-down budgeting.
C) operational budgeting.
D) revenue budgeting.
E) horizontal budgeting.