1) Which of the following statements best represents the controllability principle?

A) An investment center manager should be evaluated based on return on investment, not residual income.

B) A cost center manager should be evaluated on costs and revenues, not just costs.

C) A profit center manager should be evaluated based on segment margin, not profit margin.

D) A profit center manager should be evaluated based on residual income, not return on investment.

2) Bakers, Inc. uses a balanced scorecard. One of the measures on the scorecard is the percentage of revenue from repeat sales. Which balanced scorecard perspective would this measure most likely fit into?

A) Financial perspective

B) Internal business perspective

C) Learning and growth perspective

D) Customer perspective

3) Profit margin can be calculated as:

A) sales revenue/average invested assets.

B) operating income/sales revenue.

C) operating income/average invested assets.

D) average invested assets/sales revenue.