1. Results control is based on the concept of rewarding good results and punishing poor results. The four components of results control are: a) Defining the performance dimension, measuring performance, setting targets, and reviewing results. b) Defining the performance dimension, measuring performance, setting targets, and providing rewards or punishment. c) Defining the performance dimension, setting targets, reviewing results, and providing rewards or punishment. d) Measuring performance, setting targets, reviewing results, and providing rewards or punishment 2. What is the definition of opportunity cost? a) A cost that cannot be changed regardless of the alternative selected b) A future cost that differs between alternatives. () A past cost that differs between alternatives. d) The benefit foregone when and action is taken. 3. Conformance quality a) Is when a product is made well according to specification b) Is when a product is made well according to luxury. c) Is when a product is made well according to customer's needs. d) Is the opposite of design quality.4. Which of the following statements best describes shadow prices? 3 2) Prices at which profits is maximized as one constraint increases or decreases by 1 unit. bj Prices at which cost is maximized as one constraint increases or decreases by 1 unit () Prices customers are willing to pay for a one unit increase in a constraint. d) Prices at which sales generate profits.| 5. Ace Company uses just-in-time inventory methods to manage its inventories. Which of the following statements is incomect concerning this company? a) Inventory costs will fluctuate greatly from month to month because of variability in sales. b) There will typically be very low levels of inventories period to period () Inventory cost will be dealt with more effectively. d) None of the above. 6. Regarding the accrual accounting rate of return (AARK) method, which of the following is true? a) The AARR method uses a predetermined hurdle rate to determine the present value of the relevant cash flows b) The AARR method considers all returns over the life of the project. c) The AARR method is based on income before taxes, depreciation, and amortization divided by the net initial investment. d) The AARR method is equal to the internal rate of return.7. Which of the following types of responsibility centre is typically evaluated in terms of whether or not the profit divided by the amount of investment exceeds a certain percentage? a) Investment centre bj Cost centre Profit centre d) Any responsibility centre 4 8. Which of the following is a disadvantage of decentralization? a) Decentralization is a form of motivation. bj Reactions to problems are slower in decentralized organizations. Information systems are simplified in a decentralized system Short term decisions can be harmful in the long run in a decentralized environment. 9. What purpose does economic value added (EVA) serve? ") Identifies proven strategies for decreasing the market value of the organization. b) Identifies low return projects and redirects resources into them. () Makes strategic decisions that ensure optimal use of capital d) Makes operational decisions that ensure optimal use of capital 10. Which of the following is NOT an advantage of the balance scorecard (BSC) for evaluating manager's performance? a) In covers the range of activity over the short term only. b) It covers the range of activity over the long term only. c) It forces the company to cover the range of activities that lead to success, not just short term financial criteria. d) It is subject to manipulation