Question 1

The management accounting system is an informal management control system which provide information about the firm's costs,revenues,and income.

Accepted Answer

The management accounting systems is a formal management control system which provide information about the firm's costs,revenues,and income.

Question 2

Effort in terms of management control systems is defined in terms of physical exertion such as a worker producing at a faster rate.

Accepted Answer

Effort goes beyond physical exertion and includes both physical and mental actions.

Question 3

Effective management control systems should also motivate managers and other employees.

Accepted Answer

Effective management control systems should not only ensure that goals are met and resources are used efficiently, but also provide incentives for managers and other employees to perform well and achieve the desired outcomes. This can be done through performance evaluation, recognition and rewards, and a culture of accountability and continuous improvement.

Question 4

An organization should design its management control system independently of its strategies,so that the system is not affected by change of strategies in future.

Accepted Answer

To be effective,management control systems should be closely aligned with the organization's strategies and goals.

Question 5

Effort refers to physical exertion,such as a worker producing at a faster rate,but excludes non-physical aspects like acumen and diligence of a worker.

Accepted Answer

Effort is the extent to which managers strive or endeavor in order to achieve a goal.Effort goes beyond physical exertion,such as a worker producing at a faster rate,to include mental actions as well.

Question 6

If a computer manufacturer used its common stock price as a Balanced Scorecard control measure,it would be utilizing which of the following?
A)an external measure
B)customer related measure
C)internal business process measure
D)learning and growth measure

Accepted Answer

Common stock price is an external measure as it reflects the performance of the company in the stock market and is influenced by factors beyond the company's internal operations. It is not a measure of customer satisfaction or internal processes and does not relate to learning and growth.

Question 7

The human resources systems is a part of the formal management control systems of an organization.

Accepted Answer

The human resources systems, which includes hiring, training, compensation, and performance management, are an important aspect of the formal management control systems of an organization as it helps in achieving the goals and objectives of the organization through the effective management of human resources.

Question 8

Goal congruence exists when individuals work toward achieving one goal,and groups work toward achieving a different goal.

Accepted Answer

Goal congruence exists when individuals and groups work toward achieving the same goal.

Question 9

Line managers supervising individual refineries are concerned with ________.
A)obtaining information about the firm's opportunity costs
B)obtaining information about the firm's sunk costs
C)obtaining information about the firm's equipment downtime and product quality
D)obtaining information about customer satisfaction and market share

Accepted Answer

Line managers supervising individual refineries would primarily be concerned with obtaining information about the firm's equipment downtime and product quality, as their role involves overseeing the operational aspects of the refinery. They would be responsible for ensuring efficient production and maintaining the quality of the output. Obtaining information about customer satisfaction and market share would be more relevant for higher-level managers responsible for strategic decision making. Information about opportunity costs and sunk costs would be important for financial management of the refinery, but may not be directly relevant to line managers.

Question 10

Management control systems is designed only for top level managers and is not applicable to line managers.

Accepted Answer

Management control systems is applicable throughout an organization and is applicable to line managers also.

Question 11

Which of the following is a characteristic of a management control system?
A)It gathers key information that aids in the process of making decisions
B)It encourages short-term profit planning
C)Helps managers to act rapidly and with autonomy
D)It deals with coordinating planning across the organization and is not concerned with behavioral aspects of managing

Accepted Answer

A management control system gathers key information that aids in the process of making decisions.

Question 12

Which of the following is a part of the formal management control system?
A)mutual commitments among the members of the organization
B)the accounting information system provides metrics about costs,revenues,and contribution margins
C)shared values and loyalties among the members of the organization
D)general understanding about acceptable behavior for managers

Accepted Answer

The accounting information system is a key component of formal management control systems because it provides metrics related to costs, revenues, and contribution margins that are used to evaluate and monitor organizational performance. Mutual commitments, shared values, and general understandings about behavior are all important aspects of organizational culture, but they are not specific components of formal management control systems.

Question 13

The formal management control system includes shared values,loyalties,and mutual commitments among members of the company,company culture,and norms about acceptable behavior for managers and other employees.

Accepted Answer

The informal management control system includes shared values,loyalties,and mutual commitments among members of the company,company culture,and norms about acceptable behavior for managers and other employees.

Question 14

Management control systems utilize information gathered within a company and from external sources so as to aid management with their planning and control decision making.

Accepted Answer

This statement is true. Management control systems are designed to collect and analyze information from various sources, both internal and external, in order to support management decision making related to planning and control.

Question 15

Management control systems should be designed to support the organizational responsibilities of individual managers.

Accepted Answer

Management control systems should align with the specific responsibilities and tasks of individual managers, as they are key decision-makers who need timely and relevant information to effectively manage their areas of responsibility. Tailoring management control systems to individual managers' needs can improve their ability to control costs, allocate resources, and make informed decisions.

Question 16

In a management control system,which of the following is described as the extent to which managers strive or endeavor in order to achieve a goal?
A)Efficiency
B)Effectiveness
C)Effort
D)Variance

Accepted Answer

The extent to which managers strive or endeavor in order to achieve a goal is described as effort. Efficiency refers to the ability to minimize resources while maximizing outputs, effectiveness refers to the degree to which an objective is achieved, and variance refers to the difference between actual and expected outcomes.

Question 17

The formal management control system includes the shared values,loyalties,and mutual commitments among members of the organization.

Accepted Answer

The informal management control system includes the shared values,loyalties,and mutual commitments among members of the organization.

Question 18

A well-designed management control system uses information from ________.
A)internal sources only as they are the most reliable sources of information
B)external sources only as they are more dynamic and future oriented
C)both internal and external sources as a wide range of information is required
D)external sources only as they are the most reliable sources of information

Accepted Answer

A well-designed management control system should use information from both internal and external sources to have a wide range of information. Internal sources provide information on past performance and are important for day-to-day management, while external sources provide information on the industry, economic conditions, and competitors, which are important for strategic decision making and future planning. Using both types of information can help managers make informed decisions and adapt to changing conditions. Therefore, choice C is the most appropriate answer.

Question 19

Which of the following is true of goal congruence?
A)It exists when the management's strategy is in line with the shareholders' requirements.
B)It exists when individuals and groups work toward achieving the organization's goals.
C)It exists when both internal and external stakeholders of an organization have similar goals.
D)It exists when an organization's goals are in line with the social acceptability of organizational goals.

Accepted Answer

Goal congruence exists when individuals and groups work together to achieve the organization's goals. It is about aligning individual actions and objectives with the organization's overall goals to create a cohesive and effective working environment. While A, C, and D may be desirable outcomes, they are not specific to the concept of goal congruence.

Question 20

Which of the following would be considered an example of an element of an informal control system?
A)procedures developed by first level managers to help guide staff in their daily work
B)a policy that requires all employees to take at least two weeks of vacation each year
C)Shared values within an organization's culture
D)the master budget

Accepted Answer

Shared values within an organization's culture are an example of an informal control system as they influence employee behavior and decision making, but are not enforced through formal policies or procedures. The other options listed are examples of formal control systems.

Quiz 22: Management Control Systems, transfer Pricing, and Multinational Considerations

The management accounting system is an informal management control system which provide information about the firm's costs,revenues,and income.

Effort in terms of management control systems is defined in terms of physical exertion such as a worker producing at a faster rate.

Effective management control systems should also motivate managers and other employees.

An organization should design its management control system independently of its strategies,so that the system is not affected by change of strategies in future.

Effort refers to physical exertion,such as a worker producing at a faster rate,but excludes non-physical aspects like acumen and diligence of a worker.

If a computer manufacturer used its common stock price as a Balanced Scorecard control measure,it would be utilizing which of the following?

The human resources systems is a part of the formal management control systems of an organization.

Goal congruence exists when individuals work toward achieving one goal,and groups work toward achieving a different goal.

Line managers supervising individual refineries are concerned with ________.

Management control systems is designed only for top level managers and is not applicable to line managers.

Which of the following is a characteristic of a management control system?

Which of the following is a part of the formal management control system?

The formal management control system includes shared values,loyalties,and mutual commitments among members of the company,company culture,and norms about acceptable behavior for managers and other employees.

Management control systems utilize information gathered within a company and from external sources so as to aid management with their planning and control decision making.

Management control systems should be designed to support the organizational responsibilities of individual managers.

In a management control system,which of the following is described as the extent to which managers strive or endeavor in order to achieve a goal?

The formal management control system includes the shared values,loyalties,and mutual commitments among members of the organization.

A well-designed management control system uses information from ________.

Which of the following is true of goal congruence?

Which of the following would be considered an example of an element of an informal control system?