Performance Measurement and Control
Review Questions
Course Introduction
Performance Measurement and Control explores the frameworks, tools, and techniques organizations use to evaluate and influence their operational effectiveness and strategic objectives. This course covers the design and implementation of financial and non-financial performance indicators, the integration of management control systems, and the use of dashboards and balanced scorecards to align activities with overall business goals. Students will gain insight into behavioral aspects of control, performance appraisal processes, and how to use relevant data to foster improvement and support decision-making in a variety of organizational contexts.
Recommended Textbook
Managerial Accounting 2nd Edition by Karen W. Braun
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14 Chapters
2698 Verified Questions
2698 Flashcards
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Page 2
Chapter 1: Introduction to Managerial Accounting
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171 Verified Questions
171 Flashcards
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Sample Questions
Q1) Company initiatives to address sustainability and corporate responsibility not only "do the right thing",but also can lead to economic profits by increasing demand for the company's products and services.
A)True
B)False
Answer: True
Q2) The SEC has moved to adopt IFRS for which types of companies?
A)All U.S.companies
B)Only foreign companies operating in the US
C)All U.S.publicly traded companies
D)All U.S.private companies
Answer: C
Q3) Which one of the following manager responsibilities encompasses the other three?
A)Decision-making
B)Feedback
C)Planning
D)Controlling
Answer: A
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3
Chapter 2: Building Blocks of Managerial Accounting
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211 Flashcards
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Sample Questions
Q1) Receipt of materials is part of the firm's value chain.
A)True
B)False
Answer: True
Q2) What was cost of goods manufactured?
A)$1,560
B)$1,540
C)$1,580
D)$1,550
Answer: A
Q3) Which of the following are merchandising companies?
A)Manufacturers
B)Retailers
C)Wholesalers
D)Both Retailers and Wholesalers
Answer: D
Q4) Merchandising companies include both wholesalers and retailers.
A)True
B)False
Answer: True
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Chapter 3: Job Costing
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260 Verified Questions
260 Flashcards
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Sample Questions
Q1) The amount of manufacturing overhead allocated for the year based on direct labor hours would have been:
A)$160,000.
B)$167,500.
C)$175,000.
D)$200,000.
Answer: D
Q2) Job costing is used by companies that produce large numbers of identical units of production in a continuous fashion.
A)True
B)False
Answer: False
Q3) An underallocation of manufacturing overhead is typically corrected by increasing Cost of Goods Sold on the income statement.
A)True
B)False
Answer: True
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Chapter 4: Activity-Based Costing, lean Production, and the Costs of Quality
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201 Flashcards
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Sample Questions
Q1) Total manufacturing costs for part B is:
A)$ 8,200.
B)$15,200.
C)$ 5,400.
D)$12,400.
Q2) What costs are incurred to avoid poor quality goods or services in the first place?
A)Appraisal costs
B)External costs
C)Internal failure costs
D)Prevention costs
Q3) Refined costing systems can be used to allocate ANY indirect costs to ANY cost objects.
A)True
B)False
Q4) Machine set-up would most likely be classified as a:
A)unit-level activity.
B)batch-level activity.
C)product-level activity.
D)facility-level activity.
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Chapter 5: Process Costing
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224 Flashcards
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Sample Questions
Q1) Equivalent units should be computed separately for direct materials and conversion costs.
A)True
B)False
Q2) What is the total number of equivalent units for conversion costs?
A)52,400
B)61,000
C)59,400
D)54,400
Q3) If all direct materials are added at the end of the production process,and the units have made it 50% of the way through the production process,then the percentage completion for direct materials is 100%.
A)True
B)False
Q4) What is the cost per equivalent unit for direct materials?
A)$3.55
B)$3.72
C)$3.33
D)$2.97
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Chapter 6: Cost Behavior
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266 Flashcards
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Sample Questions
Q1) Regression analysis uses all data points,not just the highest and lowest volume data points.
A)True
B)False
Q2) Mixed costs are part variable and part fixed.
A)True
B)False
Q3) A "perfect" straight line would render an R-square value of zero.
A)True
B)False
Q4) The use of either absorption or variable costing will make little difference in companies:
A)with large inventories.
B)using just-in-time inventory methods.
C)with high fixed costs.
D)with high variable costs.
Q5) Describe the scattergraph method.Discuss the advantages and disadvantages of using the scattergraph method.
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Chapter 7: Cost-Volume-Profit Analysis
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Sample Questions
Q1) Checkerbox Company has a predicted operating income of $84,000 (as a targeted fixed cost).Their total variable expenses are $24,000 and their total fixed expenses are $30,000.They have a unit contribution margin of $10.
a.Calculate the break-even in sales units.
b.Calculate the break-even in sales units if the company's fixed expenses double from $30,000 to $60,000.
Q2) To find a firm's operating leverage factor at a given level of sales,you:
A)divide the contribution margin by fixed expenses.
B)divide variable expenses by fixed expenses.
C)divide the contribution margin by operating income.
D)relatively operating income by contribution margin.
Q3) Fixed costs divided by weighted-average contribution margin per unit equals:
A)contribution margin ratio.
B)margin of safety ratio.
C)break-even sales in dollars.
D)break-even sales in units.
Q4) A hotel would be an example of a company with low operating leverage.
A)True
B)False
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Chapter 8: Short Term Business Decisions
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201 Flashcards
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Sample Questions
Q1) If Andrew Corporation makes the part,how much will its operating income be?
A)$3,000 greater than if the company bought the part
B)$24,000 greater than if the company bought the part
C)$35,000 greater than if the company bought the part
D)$45,000 less than if the company bought the part
Q2) Opportunity costs should NEVER be factored in to outsourcing decisions.
A)True
B)False
Q3) Which of the following would be a consideration for "sell as is or process further" decisions?
A)Revenue generated if sold "as is"
B)Revenue generated if "further processed"
C)Costs involved in further processing
D)All of the above
Q4) What would be the effect on operating income of accepting a special order for 3,000 units at a sale price of $65 per product?
A)Increase by $327,000
B)Increase by $63,000
C)Decrease by $327,000
D)Decrease by $63,000
Page 10
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Chapter 9: The Master Budget and Responsibility Accounting
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Sample Questions
Q1) A cost center is a responsibility center in which a manager is accountable for costs ONLY.
A)True
B)False
Q2) Which of the following is the starting place for budgeting?
A)Last year's budget
B)Last year's actual amounts
C)Zero
D)Any of the above
Q3) Which term below best fits "a part,segment,or subunit of a company whose manager is accountable for specified activities"?
A)Operating budget
B)Master budget
C)Responsibility center
D)Sensitivity analysis
Q4) Budgeting is helpful to plan for cash inflows and outflows.
A)True
B)False
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Q5) List and describe three reasons why a company and its managers could benefit from the use of budgeting.
Chapter 10: Flexible Budgets and Standard Costs
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Sample Questions
Q1) When recording the use of direct materials in the production process,raw materials inventory is credited for which of the following?
A)Standard quantity of direct materials used for actual production times actual cost per pound
B)Standard quantity of direct materials used for actual production times standard cost per pound
C)Actual quantity of direct materials put into production times standard cost per pound
D)Actual quantity of direct materials put into production times actual cost per pound
Q2) The standard variable overhead cost rate for the Croskey Company is $12 per unit.Budgeted fixed overhead cost is $60,000.The Croskey Company budgeted 4,000 units for the current period and actually produced 3,860 finished units.What is the production volume variance? Assume the allocation base for fixed overhead costs is the number of units expected to be produced.
A)$3,780 favorable
B)$2,100 unfavorable
C)$2,100 favorable
D)$3,780 unfavorable
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Chapter 11: Performance Evaluation and the Balanced Scorecard
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Sample Questions
Q1) The central reservation office at American Airlines is most likely treated as a(n): A)cost center.
B)investment center.
C)profit center.
D)revenue center.
Q2) The difference between amounts in the static budget and the flexible budget for a revenue center is caused by which of the following?
A)The cost of sales
B)The selling price per unit
C)The number of units sold differs from planned sales levels
D)Both the selling price and the number of units sold
Q3) Duplication of costs is a disadvantage of decentralized organizations.
A)True
B)False
Q4) Variances which exceed a certain dollar amount or a certain percentage are the variances which are investigated when using management by exception.
A)True
B)False
Page 13
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Chapter 12: Capital Investment Decisions and the Time
Value of Money
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Sample Questions
Q1) When computing the accounting rate of return for a capital asset,which of the following is used as the equation's numerator?
A)Average annual operating income from the asset
B)Average amount invested in the asset
C)Total amount invested in the asset
D)Average net cash flows from the asset
Q2) (Present value tables are required.)Mansfield Motors is evaluating a capital investment opportunity.This project would require an initial investment of $30,000 to purchase one machine and $10,000 to purchase the other machine (both machines are required).The project equipment will have a residual value at the end of its life of $3,000.The useful life of the equipment is 5 years.The new project is expected to generate additional net cash inflows of $12,000 per year for each of the five years.Mansfield Motors' required rate of return is 14%.The net present value of this project is closest to:
A)($3,994).
B)$ 1,196.
C)$ 2,753.
D)$26,386.
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Page 14
Chapter 13: Statement of Cash Flows
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Sample Questions
Q1) Which of the following would NOT be done when calculating the change in cash from operating activities under the indirect method?
A)Add an increase in accrued interest payable
B)Deduct the purchase of equipment
C)Add a decrease in merchandise inventory
D)Deduct a decrease in accounts payable
Q2) Which of the following sections from the statement of cash flows includes activities that increase and decrease long-term assets?
A)Financing section
B)Operating section
C)Investing section
D)None of the above
Q3) Which of the following financial statements reports an entity's cash receipts and cash payments during the period?
A)The statement of cash flows
B)The statement of retained earnings
C)The balance sheet
D)The income statement
Q4) Compute the change in accounts receivable for the year.
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Chapter 14: Financial Statement Analysis
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Sample Questions
Q1) What is the dollar change in selling/general expenses?
A)$100,000
B)$75,000
C)$(4,400)
D)$20,000
Q2) What is the company's acid-test ratio for the current year?
A)0.70
B)7.54
C)1.32
D)0.30
Q3) What would a vertical analysis report with respect to the relationship between current year net sales revenue and COGS?
A)A 7% decrease from prior to current year
B)COGS was 62.00% of net sales revenue.
C)A decrease of $16,800 from prior to current year
D)An increase of $463,200 from prior to current year
Q4) In a horizontal analysis,the current period is the base period.
A)True
B)False
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