Question 1

Which of the following statements about kaizen is false?

Accepted Answer

A)  Employee empowerment will allow kaizen to occur more easily. 
B)  It requires active participation by all of a company's employees. 
C)  It takes the view that all employees are responsible for continuous improvement. 
D)  It consists of major changes that require large investments on the part of the company. 
A)  Employee empowerment will allow kaizen to occur more easily. 
B)  It requires active participation by all of a company's employees. 
C)  It takes the view that all employees are responsible for continuous improvement. 
D)  It consists of major changes that require large investments on the part of the company.

Question 2

Amber Products Inc.has two product lines: A-100 and A-200.Revenue and cost information for each of the product lines for 2008 are as follows:
$\begin{array}{lr}
 & \underline{\text {A-100}}& \underline{\text {A-200}}\
 \text {  Selling price per unit} &\$60&\$45\
 \text {Variable costs per unit  } &25&15\
 \text { Traceable fixed expenses } &\$40000&\$30000\
\end{array}$
 
In 2008,Amber had common fixed expenses of $50 000,and the company produced and sold 4000 units of A-100 and 6000 units of A-200.
Required:
Prepare a segmented income statement with a column for each product line and the total company.

Accepted Answer

None

Question 3

Bradford Inc.
Bradford Inc. manufactures and sells digital cameras. Bradford’s management team has begun an intensive program whereby more time and effort are to be focused on product quality than were focused on in the past. The following data has been compiled regarding expected quality costs in the upcoming year:
$$\begin{array} { l r } 
\text { Product quality audits } & \$ 60000 \
\text { Quality training } & 50000 \
\text { Rework costs } & 80000 \
\text { Warranty claims } & 40000 \
\text { Inspection of incoming materials } & 25000 \
\text { Scrap costs } & 20000 \
\text { Statistical process control } & 35000
\end{array}$$
-What are Bradford's total internal failure costs?

Accepted Answer

A)  $160 000 
B)  $100 000 
C)  $125 000 
D)  $140 000 
A)  $160 000 
B)  $100 000 
C)  $125 000 
D)  $140 000

Question 4

What is a potential disadvantage of using ROI as a performance measure for management?

Accepted Answer

Answers may vary based upon cl

Question 5

Why are non-financial measures necessary in today's business environment?

Accepted Answer

In today's competitive business environm

Question 6

Describe the internal business perspective of the balanced scorecard and provide an example of a critical success factor for this perspective.

Accepted Answer

The internal business perspective deals

Question 7

Which of the following is not one of the perspectives that is usually examined under the balanced scorecard approach?

Accepted Answer

A)  Learning and growth perspective 
B)  Internal business perspective 
C)  Creditor perspective 
D)  Customer perspective 
A)  Learning and growth perspective 
B)  Internal business perspective 
C)  Creditor perspective 
D)  Customer perspective

Question 8

What are two disadvantages of decentralisation?

Accepted Answer

Disadvantages of decentralisation includ

Question 9

The number of good units that can be made in a given period of time is called:

Accepted Answer

A)  throughput. 
B)  kaizen. 
C)  manufacturing cycle efficiency. 
D)  customer response time. 
A)  throughput. 
B)  kaizen. 
C)  manufacturing cycle efficiency. 
D)  customer response time.

Question 10

Which of the following statements is true regarding which product the advertising campaign should feature?

Accepted Answer

A)  Overall company profits will be higher by $45 000 if the campaign features chips rather than soft drink. 
B)  Overall company profits will be higher by $28 750 if the campaign features chips rather than soft drink. 
C)  Overall company profits will be higher by $13 750 if the campaign features chips rather than soft drink. 
D)  Overall company profits will be higher by $26 250 if the campaign features soft drink rather than chips. 
A)  Overall company profits will be higher by $45 000 if the campaign features chips rather than soft drink. 
B)  Overall company profits will be higher by $28 750 if the campaign features chips rather than soft drink. 
C)  Overall company profits will be higher by $13 750 if the campaign features chips rather than soft drink. 
D)  Overall company profits will be higher by $26 250 if the campaign features soft drink rather than chips.

Question 11

Vance Inc.requires all of its divisions to maintain a return on investment (ROI)of at least 45 per cent.The manager of one of the divisions expects the division's net operating income to be $400 000 and its sales to be $2 000 000.
Required:
Calculate the division's required average operating assets in order to achieve the minimum ROI.

Accepted Answer

Required average operating assets need t

Question 12

In general,as the manufacturing cycle time decreases,throughput will:

Accepted Answer

A)  decrease. 
B)  increase. 
C)  stay the same. 
D)  be eliminated. 
A)  decrease. 
B)  increase. 
C)  stay the same. 
D)  be eliminated.

Question 13

A company has computed that their 'asset turnover' is 3.Which of the following statements is the best interpretation of these results?

Accepted Answer

A)  For every $3 of sales,$1 of net profit is generated. 
B)  For every $3 invested in assets,$1 in net profit is generated. 
C)  For every $1 invested in assets,$3 in sales are generated. 
D)  For every $3 invested in assets,$1 in sales are generated. 
A)  For every $3 of sales,$1 of net profit is generated. 
B)  For every $3 invested in assets,$1 in net profit is generated. 
C)  For every $1 invested in assets,$3 in sales are generated. 
D)  For every $3 invested in assets,$1 in sales are generated.

Question 14

ABC Inc.has the following information available for one of its divisions:
$\begin{array}{lr}
  \text {  Average operating assets} &\$5000000\
 \text {  Return on investment (ROI)} &4\%\
 \text { Sales } &\$8000000\
\end{array}$

If ABC requires a minimum return on its investments of 25 per cent,what is their residual income?

Accepted Answer

A)  $1 950 000 
B)  $4 500 000 
C)  $6 750 000 
D)  $ 750 000 
A)  $1 950 000 
B)  $4 500 000 
C)  $6 750 000 
D)  $ 750 000

Question 15

List the four categories of quality costs and one example of each.

Accepted Answer

None

Question 16

CLR Inc.is a clothing manufacturer.Recently,CLR made and produced about 2000 shirts.During the production process,some of the shirts did not have the required number of buttons sewed on.CLR has decided to rework the shirts to add the buttons.These rework costs would most likely be classified as which type of quality cost?

Accepted Answer

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

Question 17

Describe and explain the two types of fixed costs classifications that are found when a company prepares a segmented income statement as opposed to a variable costing income statement.

Accepted Answer

On a segmented income statement,fixed co

Question 18

Which of the following statements about managerial compensation is correct?

Accepted Answer

A)  Compensating managers with year-end cash bonuses always motivates managers to do what is best for the company as a whole. 
B)  From a manager's standpoint,cash compensation is always preferable over share-based compensation. 
C)  Manager compensation should always be either cash-based or share-based. 
D)  Share-based manager compensation does not guarantee a future cash benefit to managers. 
A)  Compensating managers with year-end cash bonuses always motivates managers to do what is best for the company as a whole. 
B)  From a manager's standpoint,cash compensation is always preferable over share-based compensation. 
C)  Manager compensation should always be either cash-based or share-based. 
D)  Share-based manager compensation does not guarantee a future cash benefit to managers.

Question 19

Which of the following is the correct formula to compute residual income?

Accepted Answer

A)  Average operating assets - Net operating income 
B)  Average operating assets -(Net operating income *Minimum required rate of return) 
C)  Net operating income * Minimum required rate of return 
D)  Net operating income - (Average operating assets * Minimum required rate of return) 
A)  Average operating assets - Net operating income 
B)  Average operating assets -(Net operating income *Minimum required rate of return) 
C)  Net operating income * Minimum required rate of return 
D)  Net operating income - (Average operating assets * Minimum required rate of return)

Question 20

Which of the following is not an advantage of decentralisation?

Accepted Answer

A)  It often creates higher job satisfaction for managers. 
B)  It allows top-level managers more time to devote to long-range strategic planning. 
C)  It allows lower-level managers to focus on their own particular goals and objectives without having to consider the overall company's goals and objectives. 
D)  It permits lower-level managers to gain valuable on-the-job training in order to become better managers. 
A)  It often creates higher job satisfaction for managers. 
B)  It allows top-level managers more time to devote to long-range strategic planning. 
C)  It allows lower-level managers to focus on their own particular goals and objectives without having to consider the overall company's goals and objectives. 
D)  It permits lower-level managers to gain valuable on-the-job training in order to become better managers.

Which of the following statements about kaizen is false?

What is a potential disadvantage of using ROI as a performance measure for management?

Why are non-financial measures necessary in today's business environment?

Describe the internal business perspective of the balanced scorecard and provide an example of a critical success factor for this perspective.

Which of the following is not one of the perspectives that is usually examined under the balanced scorecard approach?

What are two disadvantages of decentralisation?

The number of good units that can be made in a given period of time is called:

Which of the following statements is true regarding which product the advertising campaign should feature?

In general,as the manufacturing cycle time decreases,throughput will:

A company has computed that their 'asset turnover' is 3.Which of the following statements is the best interpretation of these results?

ABC Inc.has the following information available for one of its divisions: Average operating assets \5 000000 Return on investment (ROI) 4\% Sales \8 000000 If ABC requires a minimum return on its investments of 25 per cent,what is their residual income?

List the four categories of quality costs and one example of each.

Describe and explain the two types of fixed costs classifications that are found when a company prepares a segmented income statement as opposed to a variable costing income statement.

Which of the following statements about managerial compensation is correct?

Which of the following is the correct formula to compute residual income?

Which of the following is not an advantage of decentralisation?

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

Which of the following statements about kaizen is false?

What is a potential disadvantage of using ROI as a performance measure for management?

Why are non-financial measures necessary in today's business environment?

Describe the internal business perspective of the balanced scorecard and provide an example of a critical success factor for this perspective.

Which of the following is not one of the perspectives that is usually examined under the balanced scorecard approach?

What are two disadvantages of decentralisation?

The number of good units that can be made in a given period of time is called:

Which of the following statements is true regarding which product the advertising campaign should feature?

In general,as the manufacturing cycle time decreases,throughput will:

A company has computed that their 'asset turnover' is 3.Which of the following statements is the best interpretation of these results?

ABC Inc.has the following information available for one of its divisions: Average operating assets \5 000000 Return on investment (ROI) 4\% Sales \8 000000 If ABC requires a minimum return on its investments of 25 per cent,what is their residual income?

List the four categories of quality costs and one example of each.

Describe and explain the two types of fixed costs classifications that are found when a company prepares a segmented income statement as opposed to a variable costing income statement.

Which of the following statements about managerial compensation is correct?

Which of the following is the correct formula to compute residual income?

Which of the following is not an advantage of decentralisation?

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