Chap 7

11. If a performance report contains items that are in a manager's control, the entire responsibility accounting system can be called into question.

a. True

b. False

12. Flexible budgeting is utilized to evaluate a cost centers performance.

a. True

b. False

13. A flexible budget is derived by dividing actual unit costs by the standard unit costs.

a. True

b. False

14. One of the drawback of the return on investment performance measure is that it considers both operating and nonoperating income.

a. True

b. False

15. When calculating ROI, assets invested represent the average of the beginning and ending asset balances for a given period.

a. True

b. False

16. For residual income figures to be comparable on a companywide basis, all investment centers must have equal access to resources and similar asset investment bases.

a. True

b. False

17. The economic value added performance measure focuses on long-term financial performance.

a. True

b. False

18. Variable costing is a method of reporting that deals only with a manager's controllable costs, variable costs.

a. True

b. False

19. A variable costing income statement is also called a traditional income statement.

a. True

b. False

20. The balanced scorecard links the perspectives of an organization's stakeholders with the organization's mission and vision, performance measures, strategic plan, and resources.

a. True

b. False