Multiple Choice - Chapter 9 Flashcards
Which of the following is a disadvantage of decentralization?
A) Managers’ motivation and retention can be increased by empowering segment managers to make decisions.
B) Certain costs of activities may be duplicated.
C) Customer response time is generally decreased.
D) Top management can concentrate on decisions that relate to day-to-day operations of segments.
Answer: B
Profit center responsibility reports include ________.
A) revenues only
B) invested capital
C) both revenues and expenses.
D) returns on investments
Answer: C
Long-term investments are made by the investment center manager for the purpose of ________.
A) increasing profits
B) decreasing profits
C) increasing interest expense
D) decreasing plant assets
Answer: A
Nora Kelly, one of the managers of a multi-national company, is responsible for generating revenues and controlling costs in order to increase the operating income of her division. However, she is not concerned about investment-related decisions. Nora is most likely to be the manager of a(n) ________.
A) cost center
B) investment center
C) profit center
D) revenue center
Answer: C
The payroll department of a manufacturing company is most likely to be a(n) ________.
A) cost center
B) revenue center
C) investment center
D) profit center
Answer: A
Which of the following is a responsibility that is common to the managers of cost, profit, and investment centers?
A) generating revenues
B) generating profits
C) managing the invested capital
D) controlling costs
Answer: D
The level of employee satisfaction is a key performance indicator of the ________ perspective of a balanced scorecard.
A) financial
B) learning and growth
C) internal business
D) customer
Answer: B
Which of the following is a key performance indicator of the internal business perspective of the balanced scorecard?
A) number of units produced per hour
B) employee turnover
C) cash flow
D) number of cross-trained employees
Answer: A
One part of the balanced scorecard helps management answer the question, “How do we look to investors and creditors?” Which of the four perspectives is being described with this statement?
A) financial
B) customer
C) internal business
D) learning and growth
Answer: A
Which of the following perspectives of the balanced scorecard focuses on the increase of company profits through increasing revenue growth and productivity?
A) financial
B) customer
C) internal business
D) learning and growth
Answer: A
