Question 1:

When managerial accountants design an evaluation system that is based on criteria for which a manager is responsible, and it is structured to encourage managers to make decisions that will meet the goals of the company as well as their own personal job goals, the framework used is _____________________.

a controllable factors framework

an uncontrollable factors framework

a responsibility accounting framework

a strategic plan framework

Question 2:

Responsibility accounting holds managers responsible for __________________.

all costs charges to their subunit

only the costs they have personally approved

all costs charged to their subunit plus a share of the company-wide fixed costs

only the costs that they can control

Question 3:

Which of the following isnota characteristic of a good performance measurement?

uses both long- and short-term performances and standards

based on activities over which managers have no control or influence

timely

consistent

Question 4:

What should an organization do if performance measures change?

make sure that there are significant overriding opportunities for each manager, if the manager is unaware of the change

obtain customer surveys on the change before communicating the change to the manager

make sure that the manager benefits without the corporation also benefiting

Make sure that the manager being evaluated is aware of the measurement change, as this may affect his or her decision-making

Question 5:

Without proper performance measures, goal congruence is almost impossible to achieve and will likely lead to ________________________________.

lost profits

more stable targets

employees satisfied with the status quo

decreased defects

Question 6:

The cost of equity is _______________________.

the rate of return required by investors to incentivize them to invest in a company

equal to the amount of asset turnover

the weighted average cost of capital

the interest associated with debt

Question 7:

The capital structure of Ridley Enterprises is: Debt 40%, Equity 60%. The cost of debt is 13% and the cost of equity is 16.5%. What is the weighted average cost of capital for Ridley Enterprises?

13.8%

16.2%

14.4%

15.1%

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