71.The concept says that managers should be evaluated on the basis of revenues and/or expenses they can control is known as the:
A. Management by exception concept.
B. Controllability concept.
C. Responsibility concept.
D. None of these.
72.Which of the following statements is
incorrect?
A. ROI is calculated as revenue divided by operating assets.
B. Operating assets are assets that are actually used to generate revenue.
C. Non-operating assets are not included in the calculation of return on investment.
D. Operating assets include both current and long-term assets.
73.The manager of Pearless Company's Toy Division is not satisfied with the level of return on investment that the division achieved this year. What can be done to improve return on investment?
A. Decrease the investment in assets
B. Increase operating expenses
C. Increase sales
D. Both decrease the investment in assets and increase sales are correct.
74.The term that describes what occurs when a manager does what is in his/her best interests and not what is in the best interests of the company as a whole is known as:
A. suboptimization.
B. strategic planning.
C. lowballing.
D. goal alignment.
75.Which of the following statements is
incorrect?
A. Turnover is calculated by dividing sales by average operating assets.
B. Margin is a measure of the profits generated from sales.
C. Return on investment can be improved by increasing sales, decreasing expenses, or increasing the asset base.
D. If return on investment increases when sales increase, that change usually is due at least in part to the effect of fixed costs (operating leverage).
76.Which of the following statements about residual income is true?
A. Residual income = Operating Income - Sales
B. Residual income = Operating Income - Operating Assets
C. Residual income is the amount of income in excess of a target or desired return on investment
D. None of these.
77.Which of the following statements regarding a balanced scorecard is correct?
A. A balanced scorecard includes several different performance measures that can be used to assess how well a business is accomplishing their mission.
B. A balanced scorecard includes financial performance measures such as ROI.
C. A balanced scorecard includes non-financial measures such as defect rates or on-time deliveries.
D. All of these.