Acct 2020 Ch 10 – Flashcards

Companies often decentralize their operations by

Which of the following is not an advantage of? decentralization?

In terms of responsibility? centers, a large corporate division would be considered? a(n)

Which of the following is? true? A. Favorable variances are variances that cause operating income to be higher than budgeted. B. Unfavorable variances should always be interpreted as? "bad news" for the company. C. Management by exception means that managers investigate all unfavorable variances but not all favorable variances. D. Favorable variances should always be interpreted as? "good news" for the company.

A segment margin is the operating income generated by subtracting

Return on investment? (ROI) can be restated as which of the? following?

Which of the following is not a valid strategy for determining a transfer? price?

Which of the following is false?? A. The master budget variance can be split into two? components: a volume variance and a flexible budget variance. B. The flexible budget is prepared using the actual volume achieved during the period. C. The volume variance is due to causes other than volume. D. The difference between actual results and the master budget is called the master budget variance.

"Number of new products? developed" would be a key performance indicator? (KPI) for which of the four balanced scorecard? perspectives?

"Hours of employee? training" would be a key performance indicator? (KPI) for which of the four balanced scorecard? perspectives?

unfavorable variance

favorable variance

ROI formula

Sales Margin formula

Capital turnover formula

RI formula

positive residual income

negative residual income

sales formula

total assets formula

operating income formula

target rate of return formula

operating income after investment formula

total assets after investment formula

factors management considers when setting minimum target rate of return

All favorable variances are investigated when using management by exception.

Using? ________ may cause a manager to reject a project that may be profitable to the company as a whole.

An investment center is generally a large division of a corporation.

Which of the following is a disadvantage of decentralization that occurs when the organization struggles to achieve goal? congruence? A. Managers receive training and experience to allow advancement in the organization. B. Unit managers have decreased motivation and retention. Your answer is not correct.C. Management does not have time to concentrate on longminus?term strategic planning. D. Unit managers may not understand the big picture of the company.

The four perspectives of the balanced scorecard include all of the following except A. learning and growth. B. cost. Your answer is correct.C. financial. D. customer.

The number of rework units may be an example of measuring which perspective of the balanced? scorecard? A. Financial B. Customer C. Internal business Your answer is correct.D. Learning and growth

Which of the following financial performance measures can be used to compare potential projects of different? sizes? A. Sales revenue B. Residual income C. ROI Your answer is correct.D. Operating income

Troy Company budgeted? $12 million for customer service? costs, but actually spent only? $10 million. Which of the following statements is the best course of action for management to take in this? instance? A. Because this? $2 million variance is? favorable, management does not need to investigate further. B. Management should not investigate every major? variance, especially an unfavorable variance. C. Management will investigate this? $2 million unfavorable variance to try to identify and correct the problem. D. Management will investigate this? $2 million favorable variance to ensure that the cost savings do not reflect skimping on customer service.

Management by exception directs? management's attention to a large variance between an actual and budget amount in a performance report.

Another name for a static budget is a flexible budget.