Multiply Choice

1. Which of the following is not a characteristic of the strategic planning process?

a. Emphasis on both the short and long run.

b. Analysis of external economic factors.

c. Review of the attributes and behavior of the organization’s competition.

d. Analysis and review of departmental process.

e. Analysis of consumer demand

2. The following are all output reports of the financial reporting system, EXCEPT

a. Variance analysis report.

b. Statement of cash flows.

c. Tax return.

d. Comparative balance sheet.

3. Which of the following budgeting processes is LEAST likely to motivate managers toward organizational goals?

a. Setting budget targets at attainable levels.

b. Participation by subordinates in the budgetary process.

c. Use of management by exception.

d. Holding subordinates accountable for the items they control.

e. Having top management set budget levels.

4. Which of the following would normally be considered in a strategic plan?

a. Setting a target of 12 percent return on sales.

b. Maintaining the image of the company as the industry leader

c. Setting a market price per share of stock outstanding.

d. Distributing monthly reports for departmental variance analysis tightening credit terms for customers to 2/10, n/30

5. At what level of management is the long-range planning function most important?

a. At top management levels.

b. At middle management levels.

c. At lower management levels.

d. For staff functions.

e. For line functions.

6. Which of the following is the basic purpose of a responsibility accounting?

a. Variance analysis

b. Motivation

c. Authority

d. Budgeting

e. Pricing

7. Which statement below best describes a profit center?

a. The authority to make decisions affecting the major determinants of profit, including the power to choose its markets and sources of supply.

b. The authority to make decisions affecting the major determinants of profit, including the power to choose its markets, sources of supply, and significant control over the amount of invested capital.

c. The authority to make decisions over the most significant costs of operations, including the power to choose the sources of supply.

d. The authority to provide specialized support to other units within the organization.

e. The responsibility for combining the raw materials, direct labor, and other factors of production into a final product.

8. Which statement below best describes an investment center?

a. The authority to make decisions affecting the major determinants of profit, including the power to choose its markers and sources of supply.

b. The authority to make decisions affecting the major determinants of profit, including the power to choose its markets and sources of supply, and significant control over the amount of invested capital.

c. The authority to make decisions over the most significant costs of operations, including the power to choose the sources of supply.

d. The authority to provide specialized support to other units within the organization.

e. The responsibility for developing markets for and selling of the output of the organization.