1) For an organization to be successful, activities within sales, manufacturing, and customer service need to be coordinated.
2) Organizations use nonfinancial control to provide a summary measure of how well their systems of operations control are working.
3) Properly chosen nonfinancial measures anticipate and explain financial results.
4) A support department, such as human resources, should be evaluated as a cost center.
5) A major problem faced by cost centers is assigning jointly earned revenues.
6) A revenue center is like an independent business.
7) The performance measures chosen should influence the employees' decision-making behavior.
8) All of the following would likely be classified as cost centers except:
A) maintenance department at local grocery store.
B) your university's computer center.
C) surgical department of hospital.
D) All of the above are cost centers.
9) A local unit is evaluated as a profit center but the corporate office controls many facets of the operation. If local-unit performance is poor, it may reflect:
A) poor corporate decisions.
B) poor local decisions.
C) conditions that no one can control.
D) All of the above are correct.
10) Measuring performance based on cost per unit will motivate performance that includes keeping ________ under control.
A) only costs
B) costs and on-time delivery
C) costs and the amount of defects
D) only quality