Question 1

The learning and growth perspective of Sweetcake Restaurant shows increasing customer satisfaction as an objective.Which of the following will be an appropriate performance measure of this objective?
A)Number of new chefs trained in each department
B)Order delivery time
C)Percentage growth in sales
D)Percentage growth in profit

Accepted Answer

The answer of The learning and growth perspective of Sweetcake...

Question 2

Compute the asset turnover (rounded to two decimal places)for Titania Corporation's investment center from the information given below. 
A)1.78
B)0.56
C)0.11
D)9.00

Accepted Answer

The answer of Compute the asset turnover (rounded to two...

Question 3

Awards are often used to encourage
A)intermediate performance.
B)short-term performance.
C)long-term performance.
D)both short-term and long-term performance.

Accepted Answer

Awards are designed to motivate both short-term and long-term performance by recognizing immediate achievements and encouraging sustained effort over time.

Question 4

Which of the following types of incentives encourages an employee to think as both investor and employee?
A)Profit-sharing plans
B)Awards
C)Cash bonuses
D)Stock option programs

Accepted Answer

Stock option programs give employees the opportunity to purchase company stock at a discounted price, which encourages them to think like investors and focus on the company's long-term success. Additionally, stock options typically require the employee to remain with the company for a certain period of time before they can exercise their options, which means they have a vested interest in the company's success as an employee as well.

Question 5

Which of the following is a stakeholder of an organization?
A)The accounts receivable clerk of the organization
B)A vice president of the organization
C)A line supervisor of the organization
D)All of these choices

Accepted Answer

All employees of an organization, including the accounts receivable clerk, line supervisor, and vice president, are stakeholders as they have a vested interest in the success and performance of the organization. Other stakeholders may include shareholders, customers, suppliers, and government agencies.

Question 6

Compute the residual income for Zeus Company's investment center from the information below. 
A)$600
B)$3,100
C)$4,350
D)$1,850

Accepted Answer

The answer of Compute the residual income for Zeus Company's...

Question 7

Compute the current liabilities for the Atlas Technologies using the information given below: 
A)$53,000
B)$166,667
C)$125,000
D)$100,000

Accepted Answer

The answer of Compute the current liabilities for the Atlas...

Question 8

Compute the average assets invested for the Omega International's investment center as shown below. 
A)$14,350
B)$14,400
C)$14,300
D)$14,250

Accepted Answer

The answer of Compute the average assets invested for the...

Question 9

Compute the profit margin (rounded to nearest percent)for Titania Corporation's Investment center using the following information. 
A)5%
B)6%
C)8%
D)13%

Accepted Answer

The answer of Compute the profit margin (rounded to nearest...

Question 10

Identify and describe the five different responsibility centers,and provide one example of each.

Accepted Answer

The answer of Identify and describe the five different responsibility...

Question 11

Compute the return on investment (rounded to nearest percent)for the Tim Tom investment center from the information given below. 
A)21%
B)18%
C)15%
D)12%

Accepted Answer

To calculate the return on investment, we need to divide the net income by the initial investment and multiply by 100 to get a percentage. From the information given in the exhibit, we can see that the net income for the year is $700,000 and the initial investment is $3,333,333. Therefore, the ROI is:

ROI = (Net Income / Initial Investment) x 100
ROI = ($700,000 / $3,333,333) x 100
ROI = 0.21 x 100
ROI = 21%

Option A provides the highest ROI, so it is the best choice.

Question 12

Which of the following determines a company's competitive advantage by comparing its performance with that of its closest competitors?
A)Asset turnover
B)Organization chart
C)Cost center
D)Benchmarking

Accepted Answer

Benchmarking is the process of comparing a company's performance with that of its closest competitors or industry leaders in order to identify areas for improvement and gain a competitive advantage. Asset turnover is a financial ratio that measures a company's efficiency in using its assets to generate revenue, but it alone does not determine a company's competitive advantage. An organization chart is a visual representation of a company's structure and hierarchy, but it is not directly related to a company's competitive advantage. Cost center refers to a department or function within a company that is responsible for controlling and reducing costs, but it is not a tool for determining a competitive advantage.

Question 13

The linking of employee compensation to the achievement of measurable business targets is called
A)compensation goal.
B)performance-based compensation.
C)performance target.
D)performance linkage.

Accepted Answer

Performance-based compensation links compensation to the achievement of measurable business targets, which is different from simply setting goals or targets. Performance linkage and performance targets are not accurate descriptions of this concept, and the term "compensation goal" is not commonly used in this context.

Question 14

Which of the following is a common type of incentive compensation?
A)Health insurance
B)Profit-sharing plans
C)Pension plans
D)Flexible spending programs

Accepted Answer

Profit-sharing plans are a common type of incentive compensation where employees receive a portion of the company's profits as a form of reward for their performance. Health insurance, pension plans, and flexible spending programs are benefits provided to employees but are not necessarily considered incentive compensation.

Question 15

Compute the May 2014 EVA for an investment center with the following information: 
A)$12,292,405
B)$12,710,500
C)$11,931,500
D)$12,235,500

Accepted Answer

The answer of Compute the May 2014 EVA for an...

Question 16

One of the major goals of the Sweetcake Restaurant is customer satisfaction.In the light of this goal,match the internal business processes perspective with the appropriate target.
A)Increase the continuous training to chefs
B)Serve the food within 10 minutes of placing an order
C)Make sure the customer appreciation program is successful
D)Increase the profits of the restaurant

Accepted Answer

Serving the food within 10 minutes of placing an order directly impacts the internal business processes by improving operational efficiency and ensuring customer satisfaction through timely service.

Question 17

Which of the following is a common assumption in the balanced scorecard?
A)An organization will get only what it measures
B)An organization will achieve the benchmark set
C)Organization goals can be set only for a short-term period
D)An organization does not the follow traditional costing method

Accepted Answer

The balanced scorecard assumes that an organization will get only what it measures, meaning that if certain aspects or metrics are not measured, they may not receive adequate attention or improvement efforts. This is a key principle behind the balanced scorecard approach, as it seeks to provide a comprehensive view of an organization's performance across multiple areas, not just financial metrics.

Question 18

The balanced scorecard is a framework that links the perspectives of an organization's stakeholders with its
A)goals and vision,performance goals,strategic plan,and financial resources.
B)mission and overall plan,performance measures,departmental plans,and resources.
C)mission and vision,performance measures,strategic plans,and resources.
D)mission and vision,performance goals,overall plan,and resources.

Accepted Answer

The balanced scorecard links the perspectives of an organization's stakeholders (which would include the mission and vision of the organization) with its performance measures (which would include performance goals and measures), strategic plans, and resources. Option A is close but misses the mention of a mission and vision perspective. Option B mentions departmental plans which are not necessarily linked to the balanced scorecard. Option D is close, but again, misses the mention of performance measures.

Question 19

Why might stock options not be the best way to promote coordination of goals?
A)Stock prices can fluctuate quickly.
B)Many of the variables that affect stock prices are beyond a manager's control.
C)Employees generally do not value stock options very highly.
D)None of these choices

Accepted Answer

Stock prices are subject to a variety of external factors that a manager cannot control, such as changes in the market, the economy, or industry trends. As a result, stock options may not accurately reflect an employee's contributions to the organization or align with their personal goals. Therefore, stock options may not be the best way to coordinate goals.

Question 20

The effectiveness of a performance management and evaluation system depends on how well it coordinates the goals of
A)the entire company.
B)responsibility centers.
C)managers.
D)All of these choices

Accepted Answer

The effectiveness of a performance management and evaluation system depends on how well it coordinates the goals of the entire company, responsibility centers, and managers. A successful performance management and evaluation system must align individual employee goals with the goals of the organization, while also ensuring that responsibility centers and managers are accountable for achieving their specific targets. By taking a holistic approach and considering the goals of all stakeholders, a performance management and evaluation system can provide a clear roadmap for achieving success at all levels of the organization.

Quiz 21: Flexible Budgets and Performance Analysis

The learning and growth perspective of Sweetcake Restaurant shows increasing customer satisfaction as an objective.Which of the following will be an appropriate performance measure of this objective?

Compute the asset turnover (rounded to two decimal places) for Titania Corporation's investment center from the information given below.

Awards are often used to encourage

Which of the following types of incentives encourages an employee to think as both investor and employee?

Which of the following is a stakeholder of an organization?

Compute the residual income for Zeus Company's investment center from the information below.

Compute the current liabilities for the Atlas Technologies using the information given below:

Compute the average assets invested for the Omega International's investment center as shown below.

Compute the profit margin (rounded to nearest percent) for Titania Corporation's Investment center using the following information.

Identify and describe the five different responsibility centers,and provide one example of each.

Compute the return on investment (rounded to nearest percent) for the Tim Tom investment center from the information given below.

Which of the following determines a company's competitive advantage by comparing its performance with that of its closest competitors?

The linking of employee compensation to the achievement of measurable business targets is called

Which of the following is a common type of incentive compensation?

Compute the May 2014 EVA for an investment center with the following information:

One of the major goals of the Sweetcake Restaurant is customer satisfaction.In the light of this goal,match the internal business processes perspective with the appropriate target.

Which of the following is a common assumption in the balanced scorecard?

The balanced scorecard is a framework that links the perspectives of an organization's stakeholders with its

Why might stock options not be the best way to promote coordination of goals?

The effectiveness of a performance management and evaluation system depends on how well it coordinates the goals of