Cost Accounting 14th Edition Test Bank Chapter 22 Latest 2026–2027 Updated. Verified Questions and Answers on Responsibility Accounting and Performance Measurement. Complete Coverage for Exam Preparation and High Academic Performance.

Cost Accounting, 14e, Test Bank Ch22


Cost Accounting (‫)ةيمالسإال ةعماجال‬




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,Cost Accounting, 14e, Global Edition (Horngren/Datar/Rajan)
Chapter 22 Management Control Systems, Transfer Pricing, and Multinational Considerations

Objective 22.1

1) Which of the following is NOT a characteristic of a management control system?
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A) It aids and coordinates the process of making decisions.
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B) It encourages short-term profitability.
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C) It motivates individuals throughout the organization to act in concert.
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D) It coordinates forecasting sales and cost-driver activities, budgeting, and measuring and evaluating
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performance.
Answer: B L L



Diff: 2
L



Terms: management control system
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Objective: 1 L



AACSB: Reflective thinking
L L




2) The formal management control system includes:
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A) performance measures L



B) mutual commitments L



C) incentive plans L



D) Both A and C are correct.
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Answer: D L



Diff: 1
L



Terms: management control system
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Objective: 1 L



AACSB: Reflective thinking
L L




3) Exertion towards a goal is: L L L L



A) motivation
B) effort
C) goal congruence
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D) incentive L



Answer: B L L



Diff: 1
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Terms: L



effort L



Objective: 1 L



AACSB: Reflective thinking
L L




4) The degree of freedom to make decisions is:
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A) decentralization
B) autonomy
C) centralization
D) motivation
Answer: B
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Diff: 1
L



Terms: autonomy L L



Objective: 1 L



AACSB: Reflective thinking
L L




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,5) If an oil refinery used refinery down-time as a Balanced Scorecard control measure, it would
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represent the perspective.
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A) financial
B) customer
C) internal business process L L



D) learning and growth L L L



Answer: C L



Diff: 2 L



Terms: management control system
L L L L



Objective: 1 L



AACSB: Reflective thinking L L




6) If a computer manufacturer used its common stock price as a Balanced Scorecard control measure, it
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would represent the
L perspective. L L



A) financial
B) customer
C) internal business process L L



D) learning and growth L L L



Answer: A L



Diff: 2 L



Terms: management control system
L L L L



Objective: 1 L



AACSB: Reflective thinking L L




7) The goal of a management control system is to improve the collective decisions in an organization in
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an economically feasible way.
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Answer: TRUE L L



Diff: 1 L



Terms: management control system
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Objective: 1 L



AACSB: Communication L




8) Management control systems reflect only financial data.L L L L L L L



Answer: FALSE L



Explanation: Management control systems also reflect nonfinancial data.
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Diff: 1 L



Terms: management control system
L L L L



Objective: 1 L



AACSB: Reflective thinking L L




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, 9) Of the four perspectives of the balanced scorecard the customer perspective refers to employee
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satisfaction, absenteeism, information systems capabilities, and number of processes with real-time
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feedback.
Answer: FALSE L



Explanation: Of the four perspectives of the balanced scorecard the learning and growth perspective
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refers to employee satisfaction, absenteeism, information systems capabilities, and number of processes
L L L L L L L L L L L L



with real-time feedback.
L L



Diff: 1 L



Terms: Balanced Scorecard L L L



Objective: 1 L



AACSB: Reflective thinking L L




10) Motivation is the desire to attain a selected goal combined with the resulting drive or pursuit toward
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that goal.
L



Answer: TRUE L L



Diff: 1 L



Terms: motivation L L



Objective: 1 L



AACSB: Reflective thinking L L




11) The essence of decentralization is the freedom for managers at lower levels of the organization to
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make decisions. L



Answer: TRUE L L



Diff: 1 L



Terms: decentralization L L



Objective: 1 L



AACSB: Analytical skills L L




12) The formal management control system includes shared values, loyalties, and mutual commitments
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among members of the company, company culture, and norms about acceptable behavior for managers
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and other employees.
L L



Answer: FALSE L



Explanation: The informal management control system includes shared values, loyalties, and mutual
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commitments among members of the company, company culture, and norms about acceptable behavior
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for managers and other employees.
L L L L



Diff: 2 L



Terms: management control system
L L L L



Objective: 1 L



AACSB: Analytical skills L L




13) A well-designed management control system obtains all of its information from within the company.
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Answer: FALSE L



Explanation: Well-designed management control systems use information both from within the
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company and from outside the company, such as stock price and customer satisfaction measures. Diff:
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2
Terms: management control system
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Objective: 1 L



AACSB: Communication L




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