Question 1

Preferred performance measures are those that are sensitive to or that change significantly with the manager's performance.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is not an issue of an organization operating in different countries?

Accepted Answer

A) Inflation. 
B) Foreign currency. 
C) Cost of materials and labor. 
D) Availability of materials and skilled labor. 
E) Inflation has no impact on performance evaluation. 
A) Inflation. 
B) Foreign currency. 
C) Cost of materials and labor. 
D) Availability of materials and skilled labor. 
E) Inflation has no impact on performance evaluation.

Question 3

________,which is also called relative performance evaluation,filters out the effects of the common uncontrollable factors.

Accepted Answer

A) Motivating 
B) Controlling 
C) Benchmarking 
D) Sensitive Performance 
E) Preferred Performance 
A) Motivating 
B) Controlling 
C) Benchmarking 
D) Sensitive Performance 
E) Preferred Performance

Question 4

________ plans use a compensation mix that balances risk with short-run and long-run incentives to achieve the organization's goals.

Accepted Answer

A) Benchmark 
B) Motivational 
C) Well-designed 
D) Sensitive Performance 
E) Preferred Performance 
A) Benchmark 
B) Motivational 
C) Well-designed 
D) Sensitive Performance 
E) Preferred Performance

Question 5

Evaluating performance on the basis of improvements in EVA makes the initial method of calculating EVA more important.

Accepted Answer

A) True 
 B)False

Question 6

Discuss the decline in value of the peso compared to the U.S.dollar in 2012.How did this impact the Mexican economy?

Accepted Answer

The decline has led to higher

Question 7

Which of the following is the system that articulates the mission,purpose,and core values of a company?

Accepted Answer

A) Strategic goals. 
B) Belief systems. 
C) Boundary systems. 
D) Diagnostic control systems. 
E) Interactive control systems. 
A) Strategic goals. 
B) Belief systems. 
C) Boundary systems. 
D) Diagnostic control systems. 
E) Interactive control systems.

Question 8

Why is the DuPont method of profitability analysis the preferred method?

Accepted Answer

Because ROI can provide more insight int

Question 9

Which of the following is not true about residual income (RI)?

Accepted Answer

A) Influenced by size. 
B) Managers maximize an absolute amount. 
C) Managers maximize percentages. 
D) Stakeholders want residual income to achieve goal congruence. 
E) Managers evaluated on residual income choose new project only if residual income is positive. 
A) Influenced by size. 
B) Managers maximize an absolute amount. 
C) Managers maximize percentages. 
D) Stakeholders want residual income to achieve goal congruence. 
E) Managers evaluated on residual income choose new project only if residual income is positive.

Question 10

Contrast Crystal Company has experienced some questionable changes in both its operating income and total assets.The managerial accountant reported that operating income has decreased by 6% from $400,000 to $376,000 and its total assets have decreased by 6% from $2,025,000 to $1,900,000 in 2012.
Required
Compute the original ROI and the final ROI.

Accepted Answer

A) 35%;14% 
B) 20%;20% 
C) 20%;16% 
D) 25%;28% 
E) 13%;18% 
A) 35%;14% 
B) 20%;20% 
C) 20%;16% 
D) 25%;28% 
E) 13%;18%

Question 11

The following information was compiled for Infer-Tech PC Company applying a $500,000 initial investment with an $80,000 operating cost increase per year over a five year period.The company factored in a 15% required rate of return.
 
Required
Compute the present value of the investment in years 2 and 4.Next,compute the net present value for the investment for the full five years.

Accepted Answer

A) $17,688;$29,599;$98,952 
B) $15,123;$28,588;$103,388 
C) $11,015;$22,336;$105,950 
D) $15,866;$25,411;$101,990 
E) $5,652;$32,652;$85,420 
A) $17,688;$29,599;$98,952 
B) $15,123;$28,588;$103,388 
C) $11,015;$22,336;$105,950 
D) $15,866;$25,411;$101,990 
E) $5,652;$32,652;$85,420

Question 12

Inflation clouds the real economic returns on an asset and makes historical cost-based ROI ________.

Accepted Answer

A) stable 
B) lower 
C) higher 
D) consistent 
E) unpredictable 
A) stable 
B) lower 
C) higher 
D) consistent 
E) unpredictable

Question 13

The DuPont method of profitability analysis recognizes the ________ basic ingredients in profit-making.

Accepted Answer

A) one 
B) two 
C) three 
D) four 
E) five 
A) one 
B) two 
C) three 
D) four 
E) five

Question 14

Which of the following is not true about team performance?

Accepted Answer

A) Teams achieve better results than individuals acting alone. 
B) Companies reward individuals on team-based performance. 
C) Team incentives encourage individuals to help one another as they strive toward a common goal. 
D) The specific forms of team-based compensation vary across companies. 
E) Culture and management style have no impact on team performance. 
A) Teams achieve better results than individuals acting alone. 
B) Companies reward individuals on team-based performance. 
C) Team incentives encourage individuals to help one another as they strive toward a common goal. 
D) The specific forms of team-based compensation vary across companies. 
E) Culture and management style have no impact on team performance.

Question 15

What can mangers do to prevent unethical and fraudulent behavior in organizations?

Accepted Answer

Managers can prevent unethical and outri

Question 16

Return on investment (ROI)is an accounting measure of ________ divided by an accounting measure of investment.

Accepted Answer

A) income 
B) variable costs 
C) current assets 
D) operating income 
E) income before income taxes 
A) income 
B) variable costs 
C) current assets 
D) operating income 
E) income before income taxes

Question 17

Should operating income or net income be used as the numerator to calculate ROI?

Accepted Answer

Some companies use operating income as t

Question 18

Step 1 of the designing accounting-based performance measures is Choose Performance Measures That Align with Top Management's Financial Goals.

Accepted Answer

A) True 
 B)False

Question 19

________ give executives the right to buy company stock at a specified price within a specified period.

Accepted Answer

A) Benchmarks 
B) Stock Options 
C) Motivational Plans 
D) Sensitive Performance 
E) Preferred Performance 
A) Benchmarks 
B) Stock Options 
C) Motivational Plans 
D) Sensitive Performance 
E) Preferred Performance

Question 20

Accepted Answer

A) True 
 B)False

Preferred performance measures are those that are sensitive to or that change significantly with the manager's performance.

Which of the following is not an issue of an organization operating in different countries?

________,which is also called relative performance evaluation,filters out the effects of the common uncontrollable factors.

________ plans use a compensation mix that balances risk with short-run and long-run incentives to achieve the organization's goals.

Evaluating performance on the basis of improvements in EVA makes the initial method of calculating EVA more important.

Discuss the decline in value of the peso compared to the U.S.dollar in 2012.How did this impact the Mexican economy?

Which of the following is the system that articulates the mission,purpose,and core values of a company?

Why is the DuPont method of profitability analysis the preferred method?

Which of the following is not true about residual income (RI)?

Inflation clouds the real economic returns on an asset and makes historical cost-based ROI ________.

The DuPont method of profitability analysis recognizes the ________ basic ingredients in profit-making.

Which of the following is not true about team performance?

What can mangers do to prevent unethical and fraudulent behavior in organizations?

Return on investment (ROI)is an accounting measure of ________ divided by an accounting measure of investment.

Should operating income or net income be used as the numerator to calculate ROI?

Step 1 of the designing accounting-based performance measures is Choose Performance Measures That Align with Top Management's Financial Goals.

________ give executives the right to buy company stock at a specified price within a specified period.

Companies that adopt EVA^© define investment as total assets employed plus current liabilities.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Process Costing and Cost Allocation

Activity-Based Costing and Activity-Based Management

Pricing Decisions, customer Profitability, and Cost Management

Determining How Costs Behave

Decision Making and Relevant Information

Quality, inventory Management, and Time

Capital Investments

Master Budget and Responsibility Accounting

Flexible Budgets, cost Variances, and Management Control

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Transfer Pricing

Filters

Exam 16: Performance Measurement and Compensation

Preferred performance measures are those that are sensitive to or that change significantly with the manager's performance.

Which of the following is not an issue of an organization operating in different countries?

________,which is also called relative performance evaluation,filters out the effects of the common uncontrollable factors.

________ plans use a compensation mix that balances risk with short-run and long-run incentives to achieve the organization's goals.

Evaluating performance on the basis of improvements in EVA makes the initial method of calculating EVA more important.

Discuss the decline in value of the peso compared to the U.S.dollar in 2012.How did this impact the Mexican economy?

Which of the following is the system that articulates the mission,purpose,and core values of a company?

Why is the DuPont method of profitability analysis the preferred method?

Which of the following is not true about residual income (RI)?

Inflation clouds the real economic returns on an asset and makes historical cost-based ROI ________.

The DuPont method of profitability analysis recognizes the ________ basic ingredients in profit-making.

Which of the following is not true about team performance?

What can mangers do to prevent unethical and fraudulent behavior in organizations?

Return on investment (ROI)is an accounting measure of ________ divided by an accounting measure of investment.

Should operating income or net income be used as the numerator to calculate ROI?

Step 1 of the designing accounting-based performance measures is Choose Performance Measures That Align with Top Management's Financial Goals.

________ give executives the right to buy company stock at a specified price within a specified period.

Companies that adopt EVA© define investment as total assets employed plus current liabilities.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Process Costing and Cost Allocation

Activity-Based Costing and Activity-Based Management

Pricing Decisions, customer Profitability, and Cost Management

Determining How Costs Behave

Decision Making and Relevant Information

Quality, inventory Management, and Time

Capital Investments

Master Budget and Responsibility Accounting

Flexible Budgets, cost Variances, and Management Control

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Transfer Pricing

Filters

Companies that adopt EVA^© define investment as total assets employed plus current liabilities.