chapter 9-10 questions with answers.
What is a management control system? ANS -a management control system is a logical integration of
techniques to gather and use information to make planning and control decisions, to motivate employee
behavior, and to evaluate performance.
What are the purposes of a management control system? (Select all choices that apply.) ANS -A.
To communicate results and coordinate actions across the organization.
B.
To motivate managers and employees to achieve the organization's goals.
C.
To ensure that managers and employees understand the specific actions required to achieve
organizational goals.
D.
To clearly define and communicate the organization's goals.
"Goals are useless without performance measures." Do you agree? Explain. ANS -Goals without
performance measures may not be completely useless, but performance measures greatly enhance the
achievement of goals. They provide signals to managers about whether goals are being achieved.
List five characteristics of a good performance measure. (Select five that apply.) ANS -C.
Be used in evaluating and rewarding managers and employees
D.
Relate to the organization's goals
E.
Reflect key activities of the organization
F.
, Be affected by managers' actions
A.
Be easily understood by managers and employees
List four nonfinancial measures of performance that managers find useful. ANS -Average time from
order to delivery.
2.
Percentage of products delivered on time.
3.
Pounds of output per direct labor hour.
4.
Proportion of defective units produced.
Name three kinds of responsibility centers. ANS -Three types of responsibility centers are (1) cost
center, (2) profit center, and (3) investment center.
How do profit centers and investment centers differ? ANS -Investment centers go a step farther than
profit centers. Both measure profits, but an investment center also compares that profit to investment
using measures such as return on investment, residual income or EVA.
Give four examples of segments. ANS -Divisions, territories, branches and product lines
"Always try to distinguish between the performance of a segment and its manager." Why? ANS -C.
Managers should be judged on how well they attain their currently attainable objectives, focusing on
deducting controllable costs from revenues, whereas the subunit should be judged on its performance
as an economic investment.
There are four categories of cost in the quality cost report; match them to the correct explanation. ANS
-Prevention
Costs incurred to prevent the production of defective products or services.
What is a management control system? ANS -a management control system is a logical integration of
techniques to gather and use information to make planning and control decisions, to motivate employee
behavior, and to evaluate performance.
What are the purposes of a management control system? (Select all choices that apply.) ANS -A.
To communicate results and coordinate actions across the organization.
B.
To motivate managers and employees to achieve the organization's goals.
C.
To ensure that managers and employees understand the specific actions required to achieve
organizational goals.
D.
To clearly define and communicate the organization's goals.
"Goals are useless without performance measures." Do you agree? Explain. ANS -Goals without
performance measures may not be completely useless, but performance measures greatly enhance the
achievement of goals. They provide signals to managers about whether goals are being achieved.
List five characteristics of a good performance measure. (Select five that apply.) ANS -C.
Be used in evaluating and rewarding managers and employees
D.
Relate to the organization's goals
E.
Reflect key activities of the organization
F.
, Be affected by managers' actions
A.
Be easily understood by managers and employees
List four nonfinancial measures of performance that managers find useful. ANS -Average time from
order to delivery.
2.
Percentage of products delivered on time.
3.
Pounds of output per direct labor hour.
4.
Proportion of defective units produced.
Name three kinds of responsibility centers. ANS -Three types of responsibility centers are (1) cost
center, (2) profit center, and (3) investment center.
How do profit centers and investment centers differ? ANS -Investment centers go a step farther than
profit centers. Both measure profits, but an investment center also compares that profit to investment
using measures such as return on investment, residual income or EVA.
Give four examples of segments. ANS -Divisions, territories, branches and product lines
"Always try to distinguish between the performance of a segment and its manager." Why? ANS -C.
Managers should be judged on how well they attain their currently attainable objectives, focusing on
deducting controllable costs from revenues, whereas the subunit should be judged on its performance
as an economic investment.
There are four categories of cost in the quality cost report; match them to the correct explanation. ANS
-Prevention
Costs incurred to prevent the production of defective products or services.
