Question 1

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 2

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 3

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 the metrics and indicators tracked by the scorecard will be the focus of the organization's efforts and resources. This assumption underscores the importance of carefully choosing the measures and indicators tracked in the scorecard.

Question 4

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 5

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 or processes with that of its closest competitors, identifying areas of strength and weakness, and then implementing best practices to improve performance and gain a competitive advantage. A, B, and C are all internal factors that do not involve comparing performance with competitors.

Question 6

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 includes mission and vision, with performance measures, strategic plans, and resources. Option A includes performance goals, but does not explicitly mention performance measures or departmental plans. Option B includes departmental plans, but not explicitly strategic plans. Option D includes overall plan, but does not specifically mention performance measures or strategic plans.

Question 7

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 can be designed to encourage both short-term and long-term performance, depending on the goals of the awarding body and the criteria set for the award.

Question 8

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 9

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 10

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 as both investors and employees. As shareholders, they will have a vested interest in the company's success and will work harder to increase its value. Additionally, because stock options only have value if the company's stock price increases, employees are incentivized to work towards improving the company's financial performance.

Question 11

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. All of these factors must be considered and aligned for the system to be effective in driving performance and achieving business objectives.

Question 12

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 of the choices listed are stakeholders of an organization. Stakeholders are individuals or groups with an interest or concern in the success or failure of the organization, and they can include employees at all levels, as well as customers, suppliers, shareholders, and the community.

Question 13

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 14

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 is the linking of employee compensation to the achievement of measurable business targets. Option A, compensation goal, is not specific enough and could refer to any type of compensation plan. Option C, performance target, is similar to performance-based compensation but does not specifically refer to the linking of compensation. Option D, performance linkage, is not a commonly used term for this practice.

Question 15

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 profit by the initial investment and multiply by 100. From the information given, the total profit for the year is $50,000 and the initial investment was $240,000. Therefore, the return on investment is (50,000/240,000) x 100 = 20.83% which, rounded to the nearest percent, is 21%. Therefore, the best choice is A) 21%.

Question 16

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 17

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 18

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 a portion of the company's profits is distributed among its employees as a bonus. Health insurance, pension plans, and flexible spending programs are typically considered as benefits and not incentive compensation.

Question 19

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 20

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 options may not align managers' actions with company goals because stock prices can be influenced by external factors beyond a manager's control, making it an unreliable measure of performance.

Quiz 23: Flexible Budgets and Performance Analysis

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

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

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

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

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

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

Awards are often used to encourage

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.

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?

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

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

Which of the following is a stakeholder of an organization?

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

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

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

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

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

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

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

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