• "Our workers are all under labor contracts; therefore, our labor rate variance is bound to be zero." Discuss.

• Should standards be used to identify who to blame for problems? Why or why not, explain your response.

• In what way can the use of ROI as a performance measure for investment centers lead to bad decisions? How does the residual income approach overcome this problem?

• Why is using sales dollars as an allocation base usually a poor choice for allocating fixed costs to operating departments?

• Why should a service department's budgeted costs, rather than its actual costs, be charged to operating departments? Could actual costs be used, why or why not?