ACCT 292 Chapter 10 Performance
Measurement in Decentralized
Organizations questions with answers.
In decentralized organizations, decision-making authority is ANS -spread throughout the organization
An organization in which decision-making authority is spread throughout the organization is ANS -
decentralized
Lower-level managers are empowered to make decisions in a ______ organization, which can ________
motivation and job satisfaction. ANS -decentralized, increase
Which of the following is not one of the three primary types of responsibility centers? ANS -sales
Managers of cost centers are expected to ______. ANS -minimize costs, while providing an acceptable
level of service
Service departments, such as the accounting department, are generally considered _______ centers,
while sales offices are often considered _______ centers. ANS -cost, profit
In strongly decentralized organizations, even the lowest-level managers can make decisions. ANS -True
Net operating income ÷ Average operating assets = ______. ANS -Return on investment
Operations are able to respond quickly to customers and changes in the environment in a decentralized
organization because ANS -there are fewer managers that must be consulted before a decision is made
Net operating income is income before ________ and _______. ANS -interest, taxes
, Any part of an organization whose manager has control over and is accountable for all three centers
(cost, profit, or investments) is a(n) ______ center. ANS -responsibility
Which of the following business segments would not be considered a cost center? ANS -Retail outlet
Operating assets include ______. ANS -inventory
equipment
accounts receivable
Comparing actual net income to budgeted net income is often done to evaluate the manager of a(n)
_______ center. ANS -profit
Return on investment = ______. ANS -Net operating income ÷ Average operating assets
Which of the following ratios are part of the ROI formula? ANS -Net operating income ÷ Sales
Sales ÷ Average operating assets
EBIT is another term for ANS -net operating income
In order to fully understand how a manager's decisions can affect ROI, both ______ and ______ should
be computed. ANS -margin, turnover
The ROI formula typically uses ANS -average operating assets for the year
Valid criticisms of evaluating performance based on return on investment (ROI) include managers may
ANS -reject investment opportunities that are profitable for the company but have a negative impact on
a manager's ROI
be put in charge of a business segment that includes committed costs over which a manager has no
control
take actions that increase ROI in the short-run at the expense of long-term performance
Measurement in Decentralized
Organizations questions with answers.
In decentralized organizations, decision-making authority is ANS -spread throughout the organization
An organization in which decision-making authority is spread throughout the organization is ANS -
decentralized
Lower-level managers are empowered to make decisions in a ______ organization, which can ________
motivation and job satisfaction. ANS -decentralized, increase
Which of the following is not one of the three primary types of responsibility centers? ANS -sales
Managers of cost centers are expected to ______. ANS -minimize costs, while providing an acceptable
level of service
Service departments, such as the accounting department, are generally considered _______ centers,
while sales offices are often considered _______ centers. ANS -cost, profit
In strongly decentralized organizations, even the lowest-level managers can make decisions. ANS -True
Net operating income ÷ Average operating assets = ______. ANS -Return on investment
Operations are able to respond quickly to customers and changes in the environment in a decentralized
organization because ANS -there are fewer managers that must be consulted before a decision is made
Net operating income is income before ________ and _______. ANS -interest, taxes
, Any part of an organization whose manager has control over and is accountable for all three centers
(cost, profit, or investments) is a(n) ______ center. ANS -responsibility
Which of the following business segments would not be considered a cost center? ANS -Retail outlet
Operating assets include ______. ANS -inventory
equipment
accounts receivable
Comparing actual net income to budgeted net income is often done to evaluate the manager of a(n)
_______ center. ANS -profit
Return on investment = ______. ANS -Net operating income ÷ Average operating assets
Which of the following ratios are part of the ROI formula? ANS -Net operating income ÷ Sales
Sales ÷ Average operating assets
EBIT is another term for ANS -net operating income
In order to fully understand how a manager's decisions can affect ROI, both ______ and ______ should
be computed. ANS -margin, turnover
The ROI formula typically uses ANS -average operating assets for the year
Valid criticisms of evaluating performance based on return on investment (ROI) include managers may
ANS -reject investment opportunities that are profitable for the company but have a negative impact on
a manager's ROI
be put in charge of a business segment that includes committed costs over which a manager has no
control
take actions that increase ROI in the short-run at the expense of long-term performance
