Performance Measurement and Control
Review Questions
Course Introduction
Performance Measurement and Control explores the frameworks, tools, and techniques that organizations use to evaluate and manage their operations effectively. The course examines how performance metrics are designed, implemented, and aligned with strategic objectives, focusing on both financial and non-financial indicators. Students learn to develop and analyze balanced scorecards, dashboards, and other management control systems, understanding their role in monitoring efficiency, driving accountability, and supporting decision-making. Case studies and practical exercises highlight the challenges of measuring performance in complex environments and the importance of transparent control systems for organizational success.
Recommended Textbook
Cost Management A Strategic Emphasis 8th Edition by Edward Blocher
Available Study Resources on Quizplus
20 Chapters
2499 Verified Questions
2499 Flashcards
Source URL: https://quizplus.com/study-set/2666 Page 2
Chapter 1: Cost Management and Strategy
Available Study Resources on Quizplus for this Chatper
79 Verified Questions
79 Flashcards
Source URL: https://quizplus.com/quiz/53215
Sample Questions
Q1) Target costing:
A)Determines cost based on an expected market demand for the product.
B)Determines cost based on a budget.
C)Determines cost based on standard cost.
D)Determines cost based upon market price and desired profit.
Answer: D
Q2) In a local factory, employees are rewarded for finding new and better ways of changing the way they work. This company is motivating its employees to use what management technique?
A) Benchmarking.
B) Activity-Based Costing.
C) Theory of Constraints.
D) Continuous Improvement.
E) Total Quality Management.
Answer: D
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter
Available Study Resources on Quizplus for this Chatper
70 Verified Questions
70 Flashcards
Source URL: https://quizplus.com/quiz/53214
Sample Questions
Q1) The five steps of strategic decision making include all of the following steps except:
A)Obtain information and conduct analyses.
B)Determine the organization's strategy.
C)Identify the alternative actions.
D)Continue an on-going evaluation of the problem.
E)Choose and implement the desired action.
Answer: B
Q2) After critical success factors (CSFs) have been identified, the next step in developing a competitive strategy is to develop relevant and reliable measure for these CFSs.These measures are important to help the organization:
A)Make profit for any extended period.
B)Increase sales above previous year(s).
C)Develop policies to enhance customer profitability.
D)Improve productivity in selected product areas.
E)Monitor progress toward achieving strategic goals.
Answer: E
To view all questions and flashcards with answers, click on the resource link above.
4
Chapter 3: Basic Cost Management Concepts
Available Study Resources on Quizplus for this Chatper
98 Verified Questions
98 Flashcards
Source URL: https://quizplus.com/quiz/53213
Sample Questions
Q1) Structural cost drivers are to executional cost drivers as:
A)Long-term is to short-term.
B)Fixed is to variable.
C)Total is to partial.
D)Direct is to indirect.
Answer: A
Q2) The range of the cost driver in which the actual value of the cost driver is expected to fall is called the:
A)Actual cost range.
B)Driver range.
C)Activity range.
D)Expected cost range.
E)Relevant range.
Answer: E
Q3) Prime cost and conversion cost share what common element of total cost?
A)Direct labor.
B)Direct materials.
C)Variable overhead.
D)Fixed overhead.
Answer: A
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Job Costing
Available Study Resources on Quizplus for this Chatper
118 Verified Questions
118 Flashcards
Source URL: https://quizplus.com/quiz/53212
Sample Questions
Q1) Which of the following industries is more suitable for using a job costing system?
A)Chemical plants.
B)Petroleum product manufacturing.
C)Medical clinics.
D)Cement manufacturing.
E)Food processing.
Q2) Chen Textile Company's Job A had normal spoilage with the estimated disposal selling price of $500 in March attributable to this particular job; its job B had normal spoilage with the estimated cost of $300 from the general production process failure and abnormal spoilage of $100. The company also incurred scrap due to a specific job and sold it for $60 cash. It also sold the scrap common to all jobs for $110 cash in March.
Required:
(1) Prepare the necessary journal entries to record normal and abnormal spoilage costs. (2) Prepare the necessary journal entries to record both types of scrap sold.
To view all questions and flashcards with answers, click on the resource link above.
6
Chapter 5: Activity-Based Costing and Customer
Profitability Analysis
Available Study Resources on Quizplus for this Chatper
149 Verified Questions
149 Flashcards
Source URL: https://quizplus.com/quiz/53211
Sample Questions
Q1) Activity-based costing for manufacturing operations is used to assign:
A)Direct material and direct labor costs to products.
B)Direct labor and manufacturing overhead costs to products.
C)Manufacturing overhead costs to products.
D)Selling and general administrative overhead costs to products.
E)Selling and general administrative overhead and manufacturing overhead costs to products.
Q2) An activity that is performed to support the production of a new custom-order product is a(n):
A)Product-level activity.
B)Facility-level activity.
C)Unit-level activity.
D)Customer-support activity.
E)Batch-level activity.
Q3) Processing sales returns and allowances is usually classified as a:
A)Customer unit-level cost.
B)Customer batch-level cost.
C)Customer-sustaining cost.
D)Distribution-channel cost.
E)Sales-level cost.
Page 7
To view all questions and flashcards with answers, click on the resource link above.
Chapter 6: Process Costing
Available Study Resources on Quizplus for this Chatper
106 Verified Questions
106 Flashcards
Source URL: https://quizplus.com/quiz/53210
Sample Questions
Q1) In calculating unit cost in a process costing system, "conversion cost" is defined as the sum of:
A)Direct and indirect material costs.
B)Direct and indirect labor costs.
C)Direct labor and factory overhead costs.
D)Indirect labor and factory overhead costs.
E)Indirect material and factory overhead costs.
Q2) Place the following Process costing steps in the correct order: 1 - Calculate equivalent units
2 - Determine the total costs to account for
3 - Analyze flow of physical units
4 - Assign total manufacturing costs
5 - Compute unit costs
A)3, 5, 2, 1, 4.
B)2, 1, 5, 4, 3.
C)2, 3, 5, 4, 1.
D)3, 1, 2, 5, 4.
E)None of the above.
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Cost Allocation: Departments, Joint Products, and
By-Products
Available Study Resources on Quizplus for this Chatper
96 Verified Questions
96 Flashcards
Source URL: https://quizplus.com/quiz/53209
Sample Questions
Q1) In making decisions about whether to sell or further process joint products, allocation of common or joint costs is:
A)Essential.
B)Useful.
C)Irrelevant.
D)Is useful depending on the method chosen.
E)Is the only way to get the true total product cost.
Q2) The objectives of cost allocation are to:
A)Motivate, provide incentives, and determine fair rewards.
B)Accurately define, divide and spread direct costs.
C)Value, measure, and interpret cost data.
D)Connect, communicate, and discern information.
E)Define, refine, and re-define indirect costs.
Q3) Which of the following is not a "production" department in a service firm?
A)Accounting department.
B)Operations department.
C)Marketing department.
D)Factory engineering and maintenance.
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Cost Estimation
Available Study Resources on Quizplus for this Chatper
120 Verified Questions
120 Flashcards
Source URL: https://quizplus.com/quiz/53208
Sample Questions
Q1) Companies such as Walmart and UPS are committed to reducing cost and improving their competitive position through sustainability efforts. Walmart and UPS have both reduced significantly the amount of fuel used in their truck fleets.
Required:
Suggest how regression and correlation analysis might be used to supplement the efforts of companies like Walmart and UPS to improve the fuel efficiency of their trucks.
Q2) Which of the following is not one of the main issues regarding data collection which can significantly affect precision and reliability when using regression or any other cost estimation method?
A) Data accuracy.
B) Time period choice.
C) Nonlinearity.
D) Relevant range.
Q3) The R-squared in a satisfactory regression should be:
A) less than 0.3
B) greater than 0.3
C) less than 0.7
D) greater than 0.7
To view all questions and flashcards with answers, click on the resource link above.
10
CVP Analysis
Available Study Resources on Quizplus for this Chatper
105 Verified Questions
105 Flashcards
Source URL: https://quizplus.com/quiz/53207
Sample Questions
Q1) Gralyn Corp. compares two products' margin of safety ratios (MOS%). Product A has a ratio of 0.13 and product B has a ratio of 0.31. Everything else held constant, what should the managers at Gralyn Corp. do and why?
A) They should choose Product A because it will cost less than half as much to produce.
B) They should choose Product A because it is less risky and might require less management attention than Product B.
C) They should choose Product B because it will produce more than double the profit of Product A.
D) They should choose Product B because it is less risky and might require less management attention than Product A.
Q2) Which of the following items is not useful for addressing risk and uncertainty in CVP analysis?
A) Regression analysis
B) Sensitivity analysis
C) What-if analysis
D) Monte Carlo Simulation (MCS) analysis
E) Decision trees and decision tables
To view all questions and flashcards with answers, click on the resource link above.
Page 11
Chapter 10: Strategy and the Master Budget
Available Study Resources on Quizplus for this Chatper
146 Verified Questions
146 Flashcards
Source URL: https://quizplus.com/quiz/53206
Sample Questions
Q1) The act of encouraging non-value-adding actions on the part of management in order to improve indicated performance is referred to as:
A) Goal congruency.
B) Gaming the performance indicator.
C) The use of fixed-performance contract.
D) Linear optimization analysis.
E) The use of a relative-performance contract.
Q2) A budgeting system that has, in effect, a budget for a set number of periods (that is, a constant planning horizon) at all times is called a(n):
A) Financial budget
B) Operating budget
C) Rolling financial forecast
D) Capital budget
E) Master budget
Q3) Compare and contrast traditional budgeting and activity-based budgeting (ABB) along the following dimensions: budgeting unit; primary focus; time orientation; roles of suppliers and customers; and, control objective.
Q4) Explain benefits of implementing a master budgeting system.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 11: Decision Making With a Strategic Emphasis
Available Study Resources on Quizplus for this Chatper
137 Verified Questions
137 Flashcards
Source URL: https://quizplus.com/quiz/53205
Sample Questions
Q1) A truck, costing $25,000 and uninsured, was wrecked the very first day it was used. It can either be disposed for $5,000 cash and replaced with a similar truck costing $27,000, or it can be rebuilt for $20,000 and be brand new as far as operating characteristics and looks are concerned. The preferred decision alternative provides a net cost savings of:
A) $2,000.
B) $5,000.
C) $7,000.
D) $12,000.
E) Some amount other than these choices.
Q2) In deciding whether to accept or reject a "special sales order," managers need critical information about all the following except:
A) Relevant costs.
B) Prior period operating costs.
C) Any opportunity costs associated with accepting the order.
D) The strategic, competitive environment of the firm.
E) Alternative uses of existing capacity.
To view all questions and flashcards with answers, click on the resource link above.
13
Chapter 12: Strategy and the Analysis of Capital Investments
Available Study Resources on Quizplus for this Chatper
167 Verified Questions
167 Flashcards
Source URL: https://quizplus.com/quiz/53204
Sample Questions
Q1) Amster Corporation has not yet decided on its discount rate for use in the evaluation of capital budgeting proposals.This lack of information will prohibit the company from calculating a proposed investment's: \[\begin{array}{l}
\begin{array} { l l l l } &\text { Accounting Rate of Return } &\text { Net Present Value }&\text { Internal Rate of Return }\\
\text { A) } & \text { No } & \text { No } & \text { No } \\
\text { B) } & \text { Yes } & \text { Yes } & \text { Yes } \\
\text { C) } & \text { No } & \text { Yes } & \text { Yes } \\
\text { D) } & \text { No } & \text { Yes } & \text { No } \\
\text { E) } & \text { Yes } & \text { No } & \text { Yes }
\end{array}
\end{array}\]
A)Option A
B)Option B
C)Option C
D)Option D
E)Option E
To view all questions and flashcards with answers, click on the resource link above.
14
Chapter 13: Cost Planning for the Product Life Cycle: Target
Costing, Theory of Constraints, and Strategic Pricing
Available Study Resources on Quizplus for this Chatper
94 Verified Questions
94 Flashcards
Source URL: https://quizplus.com/quiz/53203
Sample Questions
Q1) The sequence of phases in the product or service's life in the market - from the introduction of the product or service to the growth in sales and finally maturity, decline, and withdrawal from the market is the:
A) Sales life cycle.
B) Target life cycle.
C) Market life cycle.
D) Critical life cycle.
E) Cost life cycle.
Q2) When comparing Activity-based costing (ABC) and the Theory of Constraints (TOC), the approach each method takes toward profitability analysis is:
A) TOC takes a short-term approach and ABC takes a long-term approach.
B) TOC takes a long-term approach and ABC takes a short-term approach.
C) Both TOC and ABC take a short-term approach.
D) Both TOC and ABC take a long-term approach.
Q3) Target cost can be defined as:
A) Manufacturing cost - sales price.
B) Competitive price - desired profit.
C) Desired profit - market price.
D) Target price - manufacturing cost.
Page 15
To view all questions and flashcards with answers, click on the resource link above.
Chapter 14: Operational Performance Measurement:
Direct-Cost Variances, and the Role of Nonfinancial
Performance Measures
Available Study Resources on Quizplus for this Chatper
178 Verified Questions
178 Flashcards
Source URL: https://quizplus.com/quiz/53202
Sample Questions
Q1) Joe Malay received the following report on the Division's operation for the month of August: Direct labor rate variance = $25,000 unfavorable; Direct labor efficiency variance = $70,000 (?). The standard calls for 3.0 direct labor hours per unit of output at $28.00 per labor hour (SP). The standard direct labor hours allowed for the units manufactured (SQ) is 20 percent more than the total direct labor hours worked (AQ) in August.
What were the total standard hours allowed (SQ) for the units manufactured in August (to the nearest whole number)?
A) 10,000.
B) 12,000.
C) 12,500.
D) 15,000.
E) 15,625.
Q2) Within the context of the material covered in Chapter 14 for operational performance measurement, define the term "sales-volume variance." List some common causes of the sales-volume variance.
Q3) What is a direct materials usage ratio? For what purpose is this ratio used?
Q4) Discuss some major differences between static and flexible budgets.
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: Operational Performance Measurement:
Indirect-Cost Variances and Resource-Capacity Management
Available Study Resources on Quizplus for this Chatper
167 Verified Questions
167 Flashcards
Source URL: https://quizplus.com/quiz/53201
Sample Questions
Q1) In a standard cost system, an unfavorable production-volume variance would result if:
A) There is an unfavorable labor efficiency variance.
B) There is an unfavorable labor rate variance.
C) Actual production is less than the "denominator volume" (that is, the volume level used to establish the fixed overhead application rate).
D) There is an unfavorable fixed manufacturing overhead spending variance.
E) Actual fixed overhead costs are greater than budgeted fixed overhead costs.
Q2) Systematic variances, as this term is used in the text, are persistent and most likely:
A) Are not worth management time and effort to investigate.
B) Average out to a steady-state amount over time.
C) Will recur unless corrected.
D) Are small in amount.
E) Must be allocated at the end of the period to inventory and cost of goods sold accounts.
Q3) What are the four (4) steps in determining the standard fixed factory overhead application rate? Does the procedure differ for product-costing versus cost-control purposes? Explain.
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 16: Operational Performance Measurement:
Further Analysis of Productivity and Sales
Available Study Resources on Quizplus for this Chatper
134 Verified Questions
134 Flashcards
Source URL: https://quizplus.com/quiz/53200
Sample Questions
Q1) Which one of the following does not use the dollar amount of the input in assessing productivity?
A) Financial productivity.
B) Total productivity.
C) Operational productivity.
D) Productivity.
E) Partial financial productivity.
Q2) One major problem in measuring the productivity of a service organization is the absence of:
A) Overhead costs.
B) A common measure for its outputs.
C) Mandatory financial reporting.
D) Materials costs.
Q3) Which of the following is not a key determinant of productivity for most organizations?
A) Control of waste.
B) Product and manufacturing process innovation.
C) Control of overhead costs.
D) Fluctuations in demand.
To view all questions and flashcards with answers, click on the resource link above. Page 18
Chapter 17: The Management and Control of Quality
Available Study Resources on Quizplus for this Chatper
146 Verified Questions
146 Flashcards
Source URL: https://quizplus.com/quiz/53199
Sample Questions
Q1) The tool that can be used to depict main causes for an identified quality problem, subdivided into categories represented as machines, materials, methods, and manpower, is called a:
A) Cause-and-effect diagram.
B) Statistical run chart.
C) Pareto diagram.
D) Histogram.
E) Statistical control chart.
Q2) Which of the following is a tool that indicates how frequently each type of quality defect occurs?
A) Control chart.
B) Pareto diagram.
C) Cause and effect diagram.
D) Fishbone diagram.
E) Ishikawa diagram.
Q3) What is the reasoning behind the misconception that quality improvements decrease productivity?
Q4) Provide four reasons why both internal and external nonfinancial measures of quality are integral components of a comprehensive system for managing and controlling quality.
Page 19
To view all questions and flashcards with answers, click on the resource link above.
Chapter 18: Strategic Performance Measurement: Cost
Centers, Profit Centers, and the Balanced Scorecard
Available Study Resources on Quizplus for this Chatper
130 Verified Questions
130 Flashcards
Source URL: https://quizplus.com/quiz/53198
Sample Questions
Q1) An employment contract is an agreement between the manager and top management designed to provide incentives for the manager to act:
A) Independently to achieve top management's objectives.
B) Consistently with that of other managers.
C) Independently to achieve the manager's objectives.
D) Independently to achieve the customer's objectives.
Q2) The replacing of controllable costs with non-controllable costs by a department is:
A) Budget slack.
B) Cost shifting.
C) Outsourcing.
D) Discretionary-cost method.
E) Engineered-cost approach.
Q3) Which of the following is not a step to maximize the value of nonfinancial measures, as suggested by Ittner and Larcker?
A) Benchmark with similar firms.
B) Base actions on findings.
C) Develop a causal model.
D) Assess outcomes.
To view all questions and flashcards with answers, click on the resource link above. Page 20
Chapter 19: Strategic Performance Measurement:
Investment Centers and Transfer Pricing
Available Study Resources on Quizplus for this Chatper
151 Verified Questions
151 Flashcards
Source URL: https://quizplus.com/quiz/53197
Sample Questions
Q1) Return on investment (ROI), residual income (RI), and Economic Value Added (EVA®) all have in common which one of the following characteristics?
A) They all lead to goal-congruency problems when used to evaluate subunit performance.
B) They all incorporate nonfinancial performance measures into the metric.
C) They all rely on the use of data used in the preparation of financial statements (for external reporting).
D) They are all relative (rather than absolute) performance indicators.
E) They all incorporate in the financial performance metric some measure of investment.
Q2) The conventional return on investment (ROI) performance measure calculates "profit" and "investment" based on:
A) American Accounting Association (AAA) recommendations.
B) U.S. Generally Accepted Accounting Principles (GAAP).
C) The American Institute of Certified Public Accountants (AICPA) regulations.
D) The legal and business professions' practices.
E) Requirements specified by the U.S. Securities and Exchange Commission (SEC).
Q3) 0
To view all questions and flashcards with answers, click on the resource link above.
Page 21
Chapter 20: Management Compensation, Business
Analysis,
and Business Valuation
Available Study Resources on Quizplus for this Chatper
108 Verified Questions
108 Flashcards
Source URL: https://quizplus.com/quiz/53196
Sample Questions
Q1) In service firms, financial results can be measured by all the following except:
A)Staff utilization.
B)The profit multiplier.
C)Collections of accounts.
D)Throughput.
Q2) Which one of the following forms of compensation includes special services and benefits for the employee?
A) Perk.
B) Stock option.
C) Performance shares.
D) Bonus.
E) Salary.
Q3) In management compensation, the use of the balanced scorecard achieves: A)Fairness.
B)Alignment of manager's incentives and the organization's strategy.
C)The desired ethical environment.
D)Revenue generation and cost control.
E)A specific non-financial measurement.
To view all questions and flashcards with answers, click on the resource link above. Page 22