Question 1

The manager of a cost centre has control over:

Accepted Answer

A)  revenues and costs. 
B)  costs only. 
C)  costs and investment decisions. 
D)  pricing decisions. 
A)  revenues and costs. 
B)  costs only. 
C)  costs and investment decisions. 
D)  pricing decisions.

Question 2

Which of the following is generally not one of the classifications of quality costs?

Accepted Answer

A)  Appraisal (detection)costs 
B)  Prevention costs 
C)  Internal control costs 
D)  External failure costs 
A)  Appraisal (detection)costs 
B)  Prevention costs 
C)  Internal control costs 
D)  External failure costs

Question 3

Pennington Products
Pennington Products has two product lines: R-100 and R-200. Revenue and cost information for each of the product lines are as follows:
$\begin{array}{lrr}
&\underline{\text { R-100 }}&\underline{\text { R-200 }}\
\text { Selling price per unit } & \$ 45 & \$ 60 \
\text { Variable costs per unit } & 15 & 24 \
\text { Traceable fixed expenses } & \$ 250000 & \$ 360000
\end{array}$

Pennington has common fixed expenses of $250 000 per year. Last year, the company produced and sold 30 000 units of R-100 and 20 000 units of R-200.
-What is the company's overall net income?

Accepted Answer

A)  $1 260 000 
B)  $ 510 000 
C)  $1 010 000 
D)  $ 760 000 
A)  $1 260 000 
B)  $ 510 000 
C)  $1 010 000 
D)  $ 760 000

Question 4

When a few individuals at the top of an organisation retain decision-making authority,the organisation is referred to as a(n):

Accepted Answer

A)  investment centre. 
B)  decentralised organisation. 
C)  profit centre. 
D)  centralised organisation. 
A)  investment centre. 
B)  decentralised organisation. 
C)  profit centre. 
D)  centralised organisation.

Question 5

Match the following critical success factors with the appropriate perspective of the balanced scorecard.Use the following key: F = Financial,C = Customer,IB = Internal business,and LG = Learning and growth.
a.the efficient and effective use of employees
b.increasing the quality of products and services
c.increasing the number of new products
d.improving quality throughout the production process
e.increasing information systems capabilities
f.increasing ROI
g.reducing delivery time
h.increasing customer satisfaction

Accepted Answer

a.LG
b.C
c

Question 6

HNW Ltd.
HNW Ltd. manufactures and sells food processors. A popular consumer magazine has recently evaluated food processors and has ranked HNW’s processors as being of ‘poor quality’. As a result, HNW’s management team has begun to analyse all costs associated with their food processors in more detail, and the following data has been compiled:
$\begin{array}{lr}
\text { Scrap costs } & \$ 80000 \
\text { Quality training } & 75000 \
\text { Warranty claims } & 100000 \
\text { Rework costs } & 50000 \
\text { Inspection of incoming materials } & 30000 \
\text { Product quality audits } & 60000 \
\text { Statistical nrocess control } & 40000
\end{array}$
-What are HNW's total external failure costs?

Accepted Answer

A)  $130 000 
B)  $160 000 
C)  $180 000 
D)  $100 000 
A)  $130 000 
B)  $160 000 
C)  $180 000 
D)  $100 000

Question 7

What are the four perspectives looked at by the balanced scorecard approach?

Accepted Answer

The four perspective

Question 8

Throughput would be a measure of performance under which perspective of the balanced scorecard?

Accepted Answer

A)  Internal business 
B)  Customer 
C)  Financial 
D)  Learning and growth 
A)  Internal business 
B)  Customer 
C)  Financial 
D)  Learning and growth

Question 9

Barksdale Manufacturing Inc.produces its products in batches containing 100 units.Barksdale randomly samples 15 of the units in each batch for quality control.The costs of performing these random sample tests would most likely be which type of quality cost?

Accepted Answer

A)  External failure cost 
B)  Prevention cost 
C)  Internal failure cost 
D)  Appraisal (detection)cost 
A)  External failure cost 
B)  Prevention cost 
C)  Internal failure cost 
D)  Appraisal (detection)cost

Question 10

Describe one method that a company might use to improve or monitor the quality of its products or services.

Accepted Answer

Companies can focus on improving the qua

Question 11

Fun-Town Amusement Centre
Fun-Town Amusement Centre offers a variety of family entertainment. The amusement centre consists of three separate divisions: miniature golf, arcade, and laser tag. The following information in available regarding each of these divisions for the year just ended:
$\begin{array}{lrrr}
&\text { Miniature } \
&\underline{\text { Golf }}&\underline{\text { Arcade }} &\underline{ \text { Laser Tag} }\
\text { Revenues } & \$ 225000 & \$ 500000 & \$ 300000 \
\text { Variable expenses } & 50000 & 100000 & 75000 \
\text { Traceable fixed expenses } & 30000 & 40000 & 35000
\end{array}$

Common fixed costs of $60 000 are divided equally among the divisions.
-The segment margin for the arcade division is:

Accepted Answer

A)  $300 000 
B)  $400 000 
C)  $360 000 
D)  $340 000 
A)  $300 000 
B)  $400 000 
C)  $360 000 
D)  $340 000

Question 12

Which of the following statements is true regarding more traditional measures of financial performance?

Accepted Answer

A)  They often look at a company's performance from four different but related perspectives: financial,customer,internal business,and learning and growth. 
B)  They are often superior to measuring a company's performance than the balanced scorecard approach. 
C)  Performance problems are often not captured in as timely a fashion as with the balanced scorecard approach. 
D)  They tend to focus on non-financial rather than financial measures of performance. 
A)  They often look at a company's performance from four different but related perspectives: financial,customer,internal business,and learning and growth. 
B)  They are often superior to measuring a company's performance than the balanced scorecard approach. 
C)  Performance problems are often not captured in as timely a fashion as with the balanced scorecard approach. 
D)  They tend to focus on non-financial rather than financial measures of performance.

Question 13

Which of the following statements about quality costs is true?

Accepted Answer

A)  A low level of internal failure costs usually indicates that more attention needs to be paid to prevention and appraisal costs. 
B)  A low level of external failure costs usually indicates that more attention needs to be paid to appraisal and internal failure costs. 
C)  A high level of internal failure costs usually indicates that more attention needs to be paid to prevention and appraisal costs. 
D)  A high level of appraisal costs usually indicates that more attention needs to be paid to external failure costs. 
A)  A low level of internal failure costs usually indicates that more attention needs to be paid to prevention and appraisal costs. 
B)  A low level of external failure costs usually indicates that more attention needs to be paid to appraisal and internal failure costs. 
C)  A high level of internal failure costs usually indicates that more attention needs to be paid to prevention and appraisal costs. 
D)  A high level of appraisal costs usually indicates that more attention needs to be paid to external failure costs.

Question 14

Hardcastle Ltd.had sales of $3 000 000 and net operating income of $800 000.Operating assets during the year averaged $1 500 000.The manager of Hardcastle is considering the purchase of a new machine which is expected to increase average operating assets by 5 per cent.If the new machine is purchased,the company's new return on investment (ROI)would be:

Accepted Answer

A)  190.5 per cent 
B)  52.5 per cent 
C)  196.9 per cent 
D)  50.8 per cent 
A)  190.5 per cent 
B)  52.5 per cent 
C)  196.9 per cent 
D)  50.8 per cent

Question 15

A system of improvement based on a series of gradual and often small improvements is called:

Accepted Answer

A)  throughput. 
B)  kaizen. 
C)  manufacturing cycle efficiency. 
D)  centralisation. 
A)  throughput. 
B)  kaizen. 
C)  manufacturing cycle efficiency. 
D)  centralisation.

Question 16

Which of the following reports provides key financial and non-financial measures of performance?

Accepted Answer

A)  Flexible budget variance report 
B)  Performance report 
C)  Production report 
D)  Common costs report 
A)  Flexible budget variance report 
B)  Performance report 
C)  Production report 
D)  Common costs report

Question 17

Which of the following statements about responsibility accounting is true?

Accepted Answer

A)  Managers should be held responsible for all price variances that occur within their department. 
B)  Managers should be held responsible for all revenues and costs that occur within their department. 
C)  Managers should be responsible for all investment decisions that occur within their department. 
D)  Managers should be held responsible for only those things under their control. 
A)  Managers should be held responsible for all price variances that occur within their department. 
B)  Managers should be held responsible for all revenues and costs that occur within their department. 
C)  Managers should be responsible for all investment decisions that occur within their department. 
D)  Managers should be held responsible for only those things under their control.

Question 18

Which of the following questions would the financial perspective of the balanced scorecard attempt to answer?

Accepted Answer

A)  How does the company continue to improve,learn,and grow? 
B)  How do customers view the company? 
C)  Which business processes must the company excel in? 
D)  How does the company create value for its stakeholders? 
A)  How does the company continue to improve,learn,and grow? 
B)  How do customers view the company? 
C)  Which business processes must the company excel in? 
D)  How does the company create value for its stakeholders?

Question 19

Which of the following statements comparing ROI and residual income is correct?

Accepted Answer

A)  ROI is more useful as a performance measure for a single investment centre. 
B)  Residual income is a better comparative measure than ROI. 
C)  ROI and residual income are equally good performance measures for a single investment centre. 
D)  Residual income is more useful as a performance measure for a single investment centre. 
A)  ROI is more useful as a performance measure for a single investment centre. 
B)  Residual income is a better comparative measure than ROI. 
C)  ROI and residual income are equally good performance measures for a single investment centre. 
D)  Residual income is more useful as a performance measure for a single investment centre.

Question 20

How does the balanced scorecard approach differ from traditional approaches to performance evaluation?

Accepted Answer

Whereas traditional approaches focus on

The manager of a cost centre has control over:

Which of the following is generally not one of the classifications of quality costs?

When a few individuals at the top of an organisation retain decision-making authority,the organisation is referred to as a(n):

What are the four perspectives looked at by the balanced scorecard approach?

Throughput would be a measure of performance under which perspective of the balanced scorecard?

Barksdale Manufacturing Inc.produces its products in batches containing 100 units.Barksdale randomly samples 15 of the units in each batch for quality control.The costs of performing these random sample tests would most likely be which type of quality cost?

Describe one method that a company might use to improve or monitor the quality of its products or services.

Which of the following statements is true regarding more traditional measures of financial performance?

Which of the following statements about quality costs is true?

A system of improvement based on a series of gradual and often small improvements is called:

Which of the following reports provides key financial and non-financial measures of performance?

Which of the following statements about responsibility accounting is true?

Which of the following questions would the financial perspective of the balanced scorecard attempt to answer?

Which of the following statements comparing ROI and residual income is correct?

How does the balanced scorecard approach differ from traditional approaches to performance evaluation?

Introduction to Managerial Accounting

Product Costing: Manufacturing Processes, cost Terminology and Cost Flows

Cost Behaviour

Job Costing and Overhead Costing Systems

Process Costing Systems

Service and Operations Costing

Departmental Overhead Costing

Activity-Based Costing

Cost-Volume-Profit Analysis

Relevant Costs and Product Planning Decisions

Long-Term Capital Investmentdecisions

Fixed and Rolling Budgets for Planning and Decision Making

Management Accounting for Cost Control and Performance Evaluation Flexible Budgets and Variance Analysis

Accounting for Sustainability Social Reporting,environmental Reporting and Management Accounting

Filters

Exam 14: Decentralisation and Modern Performance Management Systems the Balanced Scorecard

The manager of a cost centre has control over:

Which of the following is generally not one of the classifications of quality costs?

When a few individuals at the top of an organisation retain decision-making authority,the organisation is referred to as a(n):

What are the four perspectives looked at by the balanced scorecard approach?

Throughput would be a measure of performance under which perspective of the balanced scorecard?

Barksdale Manufacturing Inc.produces its products in batches containing 100 units.Barksdale randomly samples 15 of the units in each batch for quality control.The costs of performing these random sample tests would most likely be which type of quality cost?

Describe one method that a company might use to improve or monitor the quality of its products or services.

Which of the following statements is true regarding more traditional measures of financial performance?

Which of the following statements about quality costs is true?

A system of improvement based on a series of gradual and often small improvements is called:

Which of the following reports provides key financial and non-financial measures of performance?

Which of the following statements about responsibility accounting is true?

Which of the following questions would the financial perspective of the balanced scorecard attempt to answer?

Which of the following statements comparing ROI and residual income is correct?

How does the balanced scorecard approach differ from traditional approaches to performance evaluation?

Introduction to Managerial Accounting

Product Costing: Manufacturing Processes, cost Terminology and Cost Flows

Cost Behaviour

Job Costing and Overhead Costing Systems

Process Costing Systems

Service and Operations Costing

Departmental Overhead Costing

Activity-Based Costing

Cost-Volume-Profit Analysis

Relevant Costs and Product Planning Decisions

Long-Term Capital Investmentdecisions

Fixed and Rolling Budgets for Planning and Decision Making

Management Accounting for Cost Control and Performance Evaluation Flexible Budgets and Variance Analysis

Accounting for Sustainability Social Reporting,environmental Reporting and Management Accounting

Filters