Question

In: Accounting

Complete the sentences by using the following terms may be used once, more than once, or...

Complete the sentences by using the following terms may be used once, more than once, or not at all: Congruence, controllability princple, customer, decentralization, decrease, economic value added (EVA), external market price, financial, full cost, incongruence, increase, internal business, investment, learning and growth, profit, residual income, responsibility accounting, return on investment, sales revenue.

1. Managers of a(n)______center are evaulated based on measures such as ROI and residual income.

2. Supoptimal decisions and duplication of resources are considered disadvantages of______.

3. A positive_____results when mangers invest in projects that earn more than the hurdle rate.

4. The_____perspective focuses on processes required to meet customer needs through measures such as on-time delievery and quality.

5. The_____states that mangers should be held responsible only for what they can control.

6. _____measures the economic wealth that is created when a company's after-tax operating income exceeds its cost of capital.

7. The_____perspective typically contains leading indicators, which are measures that reflect future performance.

8. A change in the investment turnover ratio from 1.5 to 3.2 will____the division's ROI.

9. The maximum transfer price is the_____.

10. Goal____results when there is conflict between a manger and the organization as a whole.

Solutions

Expert Solution

Answer

1. Managers of a(n) Iinvestment center are evaulated based on measures such as ROI and residual income.

2. Supoptimal decisions and duplication of resources are considered disadvantages of Decentralization.

3. A positive Residual income results when mangers invest in projects that earn more than the hurdle rate.

4. The Internal business perspective focuses on processes required to meet customer needs through measures such as on-time delievery and quality.

5. The Controllability Principle states that mangers should be held responsible only for what they can control.

6. Economic value added (EVA) measures the economic wealth that is created when a company's after-tax operating income exceeds its cost of capital.

7. The Learing and Growth perspective typically contains leading indicators, which are measures that reflect future performance.

8. A change in the investment turnover ratio from 1.5 to 3.2 will Increase the division's ROI.

9. The maximum transfer price is the External Market Price.

10. Goal Incongruence results when there is conflict between a manger and the organization as a whole.

  


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