21 a manager is only accountable for expenses in a n center a cost b revenue c profi 4308008

21 a manager is only accountable for expenses in a n center a cost b revenue c profi 4308008

21) A manager is only accountable for expenses in a(n) ________ center.

A) cost

B) revenue

C) profit

D) investment

22) To evaluate the performance of a(an) ________, a top manager is responsible for revenues, costs, and the efficient use of the assets invested in the division.

A) cost center

B) investment center

C) profit center

D) revenue center

23) Management by ________ is the practice that directs executive attention to large budget variances.

A) control

B) objective

C) exception

D) analysis

24) Which term below best fits “a part, segment, or subunit of a company whose manager is accountable for specified activities”?

A) Operating budget

B) Master budget

C) Sensitivity analysis

D) Responsibility center

25) The human resources department for Kohl's Department Stores may be classified as a(n)

A) cost center.

B) investment center.

C) profit center.

D) revenue center.

26) Troy Company budgeted $12 million for customer service costs, but actually spent only $10 million. Which of the following statements is the best course of action for management to take in this instance?

A) Management will investigate this $2 million favorable variance to ensure that the cost savings do not reflect skimping on customer service.

B) Because this $2 million variance is favorable, management does not need to investigate further.

C) Management will investigate this $2 million unfavorable variance to try to identify and correct the problem.

D) Management should not investigate every major variance, especially an unfavorable variance.

27) Information technology has made many tasks easier, but not all tasks. Which of the following tasks performed by managers requires more critical thinking skills than the others because it is not as dependent upon information technology?

A) Sensitivity analysis

B) Analyzing and investigating the root causes of variances in responsibility center reports

C) Rolling up individual units' budgets into the companywide budget

D) Preparing responsibility center performance reports that identify variances between actual and budgeted revenues and costs

28) Which of the following is a disadvantage of decentralization that occurs when the organization struggles to achieve goal congruence?

A) Unit managers may not understand the big picture of the company.

B) Management does not have time to concentrate on long-term strategic planning.

C) Unit managers have decreased motivation and retention.

D) Managers receive training and experience to allow advancement in the organization.

29) The maintenance department that focuses on efficiency at Continental Airlines may be classified as a(n)

A) cost center.

B) investment center.

C) profit center.

D) revenue center.

30) The security department that is evaluated on its ability to control costs when the company compares actual costs to budget costs at a department store chain may be classified as a(n)

A) cost center.

B) investment center.

C) profit center.

D) revenue center.

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