exam 4

Question 1

Which is one of the potential disadvantages of​ decentralization?

A.
Struggle to achieve goal congruence
B.
Does not value the use of expert knowledge
C.
Decreases customer relations
D.
Reduces motivation and job retention

Answer 1

A.
Struggle to achieve goal congruence

Question 2

Johnson​ & Johnson’s Consumer Healthcare Division that manufactures and sells products including​ Band-Aid, Neutrogena, and Listerine is most likely treated as​ a(n)

A.
profit center.
B.
investment center.
C.
cost center.
D.
revenue center.

Answer 2

B.
investment center.

Question 3

Decentralization would typically not be based​ on:

A.
product line.
B.
total revenues.
C.
geographic line.
D.
customer base.

Answer 3

B.
total revenues.

Question 4

Which type of variance causes operating income to be higher than the budgeted operating​ income?

A.
Neutral variance
B.
Any variance
C.
Favorable variance
D.
Unfavorable variance

Answer 4

C.
Favorable variance

Question 5

The basic principle of management by exception would indicate that a manager should investigate which of the following​ variances?

A.
All favorable variances exceeding the budgeted amount
B.
All variances that are greater than a budgeted and actual dollar amount​ (or percentage)
C.
All variances regardless of the size of the variance
D.
All unfavorable variances exceeding the budgeted amount

Answer 5

B.
All variances that are greater than a budgeted and actual dollar amount​ (or percentage)