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Question;1. Performance evaluation in most firms is;applied at;A.;Many different levels from top;management down to individual production and sales employees.;B.;All levels of;production, but only top levels of sales.;C.;Top and mid-management;levels only.;D.;Lower and mid-management;levels only.;E.;The mid-management level;only.;2. Risk aversion is by;A.;Lack of a strategic emphasis in decision;making.;B.;Use of non-strategic;performance measurement systems.;C.;Presence of uncertainty;in a manager's environment.;D.;A manager's inability to;deal with stress.;3. The;process by which managers at all levels in the firm gain information about the;performance of tasks within the firm and judge that performance against;pre-established criteria is;A.;Performance measurement.;B.;Employee inspection.;C.;Goal congruence.;D.;Managerial evaluation.;E.;Management control.;4. Operational control has a;management-by-exception approach in contrast to management control, which is;more consistent with;A.;The management-by-incentives approach.;B.;The;management-by-objectives approach.;C.;The "hands;off" approach.;D.;A non-quantitative set;of measures.;E.;A non-qualitative set of;measures.;5. A;strategic business unit (SBU) consists of a well-defined set of controllable;operating activities over/about which the SBU manager is;A.;Knowledgeable.;B.;Responsible for;strategy.;C.;Responsible for strategy;and execution.;D.;Responsible for;strategy, execution, and performance.;6. The objectives of management control of the;manager include;A.;Cost, quality, and functionality.;B.;Management by;objectives.;C.;Management by exception.;D.;Motivation, incentive;and fairness.;E.;Identification, response;and performance.;7. The principal-agent economic model applied to;employment contracts deals primarily with the two management performance;aspects of;A.;Rights and duties.;B.;Uncertainty and lack of;observability.;C.;Performance and reward.;D.;Controllability and;responsibility.;E.;Risk and motivation.;8. The "risk-averse" manager will be;improperly biased to;A.;Seek out decisions with uncertain;outcomes.;B.;Make risky decisions.;C.;Avoid decisions with;uncertain outcomes.;D.;Maximize his or her own;risk and minimize the company's risk.;E.;Use resources beyond;his/her control.;9. In;properly developing formal systems at the team level that will have the desired;impact on employees' performance, the management accountant should recognize;any existing informal systems and;A.;Make plans to eliminate these informal;systems.;B.;Simply formalize them;into the system being developed.;C.;Try to eliminate them;prior to system development.;D.;Not let these;culture" aspects affect system development.;E.;Try to capture valued;culture" aspects in the formal system.;10.;The common factor among control systems in hiring practices, promotion;policies, and strategic performance measurement is;A.;Management sets expectations for desired;employee performance.;B.;Employee-determined;expectations for desired employee performance.;C.;Coordination of activities.;D.;Communication of;results.;11.;Among the benefits of centralized management in a firm is (are);A.;Effective goal congruence.;B.;Utilization of top;management expertise.;C.;Effective participation;by all levels of management.;D.;A higher level of;motivation for divisional managers.;12.;The benefits of decentralized management in a firm include all the following except;A.;Ability of SBU managers to use their;local knowledge effectively.;B.;Ability of SBU managers;to make more timely decisions.;C.;Motivation provided by;the freedom and responsibility of a decentralized environment.;D.;Improved coordination;among divisional managers.;13.;The need for coordination between the production and the selling function will;impact the choice of;A.;Profit, cost or revenue center.;B.;Manager for the firm.;C.;Formal or informal;control systems.;D.;Profitability goal for;the firm.;E.;Control measures to;prevent fraud.;14.;By not distinguishing between direct and indirect costs in their performance;reporting, many companies;A.;Generate more useful control potential;for managers.;B.;Can cause poor;decision-making.;C.;Focus on long-term;results.;D.;Focus on short-term;results.;E.;Clearly distinguish;between controllable and non-controllable costs.;15.;As a strategic issue, "budget slack" could represent a;A.;Very minor issue in most firms.;B.;Self-correcting problem;over several operating periods.;C.;Problem only in a;decentralized management environment.;D.;Lower overall level of;expected performance than is achievable.;E.;Significant increase in;the relative risk aversion of managers.;16.;Outsourcing" a cost center is often done to;A.;Reduce cost and obtain strategic focus.;B.;Increase control over a;strategic resource.;C.;Reduce the firm's;contractual relationships.;D.;Shift costs within;remaining cost centers.;17. Cost;allocation of service department costs to production departments make the;evaluation and control processes in the production departments;A.;Simpler.;B.;More complex.;C.;Forthright and fair.;D.;Less efficient.;E.;Counter productive.;18.;From a strategic standpoint, profit centers tend to;A.;Free the center manager from concerns;about markets.;B.;Place more cost emphasis;on rush orders.;C.;Provide incentive for;coordination among managers of different units.;D.;Focus managers on cost;control rather than revenue generation.;E.;All of the above answers;are correct.;19.;The contribution by profit center (CPU) expands the contribution margin income;statement by distinguishing;A.;Variable and fixed costs.;B.;Short-term and long-term;fixed costs.;C.;Controllable and;non-controllable fixed costs.;D.;Noncontrollable and;untraceable fixed costs.;E.;Net income and;contribution margin.;20.;The main concept of the;balanced scorecard is that, to evaluate the SBU's progress to strategic;success, a business must use all of the following except;A.;Both financial and non-financial;measures.;B.;Value chain analysis.;C.;Attend to customer;satisfaction needs.;D.;Multiple measures for a;comprehensive evaluation.;21.;In a non-profit organization, you are more likely to see;A.;Cost centers.;B.;Revenue centers.;C.;Profit centers.;D.;Investment centers.;22.;The evaluation by upper-level managers of the performance of mid-level managers;is;A.;Performance evaluation.;B.;Operational control.;C.;Goal congruence.;D.;Principal-agent model.;E.;Management control.;23.;The evaluation of operating level employees by mid-level managers is;A.;Performance evaluation.;B.;Operational control.;C.;Goal congruence.;D.;Principal-agent model.;E.;Management control.;24.;The manager acting independently in such a way as to simultaneously achieve top;management's objectives is;A.;Performance evaluation.;B.;Operational control.;C.;Goal congruence.;D.;Principal-agent model.;E.;Management control.;25.;A model that has been;used to better understand the key elements that contracts must have in order to;achieve the desired objectives is the;A.;Performance evaluation.;B.;Operational control.;C.;Goal congruence.;D.;Principal-agent model.;E.;Management control.;26.;Order-filling costs;A.;Include samples.;B.;Cannot often be;effectively managed as an engineered-cost center.;C.;Usually have a;relatively clear relationship to sales volume.;D.;Include commissions.;27.;Controllable margin is determined by subtracting short-term controllable fixed;costs from the;A.;Long-term controllable fixed cost.;B.;Contribution margin.;C.;Variable costs.;D.;Fixed costs.;E.;Variable costs and fixed;costs.;28.;An employment contract;is an agreement between the manager and top management designed to provide;incentives for the manager to act;A.;Independently to achieve top;management's objectives.;B.;Consistently with that;of other managers.;C.;Independently to achieve;the manager's objectives.;D.;Independently to achieve;the customer's objectives.;29.;The least common type of SBU in a retail firm is the;A.;Profit center.;B.;Cost center.;C.;Revenue center.;D.;Investment center.;30.;Which one of the following is a drawback of decentralization?;A.;Uses local knowledge only.;B.;May hinder coordination;among independent SBUs.;C.;Provides better;management control.;D.;Provides goal;congruence.;E.;Offers an efficient;method of performance evaluation.

 

Paper#45044 | Written in 18-Jul-2015

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