1. An effective control system:

1. is flexible enough to allow managers to deal with unexpected events
2. provides accurate information
3. gives managers a true picture of organizational performance
4. provides managers with timely information
5. is flexible, provides accurate information, in a timely manner, and gives managers a true picture of performance

2. Control that gives managers information about customers' reactions to goods and services so that corrective action can be taken if necessary, is known as:

1. concurrent control
2. control system
3. feedback control
4. feedforward control
5. behavior control

3. Given the information below, determine this organization's gross profit margin: Net Sales Revenue $300,000 Cost of Goods Sold $150,000 Net Profit $20,000 Total Assets $250,00

1. 15%
2. 20%
3. 50%
4. 30%

4. All of the following practices characterize an organization with a conservative culture, except:

1. Encourage participation of lower-level managers in planning and decision making
2. Use extensive bureaucratic systems of control
3. Have closed door corporate governance
4. Use MBO
5. Have a well-defined hierarchy of authority

5. Which of the following terms describes the difference between the amount of revenue generated by a product and the resources used to produce the product?

1. Gross profit margin
2. Return on capital
3. Return on investment
4. Operating margin
5. The current ratio

6. The third step in the control process is:

1. establishing standards of performance
2. measuring actual performance
3. comparing actual levels to the standards of performance
4. evaluating actual levels of performance
5. ranking performance outcomes of competitors

7. Which of the following terms is used to measure the efficiency of production by monitoring and evaluating the actual costs associated with producing goods and services?

1. Time standards
2. Variable costs
3. Utility standards
4. Output standards
5. Operating costs

8. Control systems are intended to make organizations more successful by helping managers with all but which one of the following?

1. Adapt to change and uncertainty
2. Reduce costs
3. Increase routine decision making
4. Deal with complexity
5. Facilitate teamwork

9. This ratio measures the extent to which managers have used borrowed funds to finance investments:

1. debt-to-assets ratio
2. times-covered ratio
3. quick ratio
4. current ratio
5. days sales outstanding

10. When operations managers screen job applicants by using several interviews to select the most highly skilled people, this is an example of:

1. concurrent control
2. conversion control
3. output control
4. feedforward control
5. feedback control

11. This type of ratio is used to determine if a company has the resources available to meet the claims of short-term creditors:

1. ROI
2. quick ratio
3. current ratio
4. inventory turnover
5. days sales outstanding

12. At the ________ stage of the process of transforming raw materials into finished goods, managers typically use ________ control procedures to anticipate problems before they occur.

1. input; concurrent
2. conversion; feedforward
3. output; concurrent
4. input; feedforward
5. conversion; feedback

13. Return on investment is:

1. net profit after taxes divided by total assets
2. net income before taxes divided by total assets
3. gross profit margin
4. operating profit
5. operating costs

14. Which of the following terms refers to the quantity of the service or product the employee is to produce?

1. Time standards
2. Form standards
3. Utility standards
4. Output standards
5. Behavioral standards

15. When an organization monitors the number of customer returns for each product model in an attempt to recognize when the organization is producing a large number of defective products, this is an example of:

1. feedforward control
2. concurrent control
3. production control
4. feedback control
5. bureaucratic control

16. A budget that states how managers intend to use organizational resources to achieve organizational goals is known as:

1. financial budget
2. capital budget
3. functional budget
4. operating budget
5. master budget

17. The components of an effective output control system are:

1. Objective financial measures, performance standards derived from goals, and appropriate operating budgets
2. Subjective financial measures, performance standards derived from goals, and appropriate operating budgets
3. Cost budget analysis, divisional goals, and performance standards
4. Capital budget planning, evaluation of results, and corrective action taken when necessary
5. Feedforward, control mechanisms, capital budget planning, and operational goals

18. All of the following are measures of financial performance, except:

1. Profit ratios
2. Liquidity ratios
3. Leverage ratios
4. Activity ratios
5. Feedforward ratios

19. Which of the following measures how well managers are creating value from organizational assets?

1. Liquidity rations
2. Times-covered ratios
3. Investment ratios
4. Activity ratios
5. Current ratios