Question 1

The step of the control process utilized by managers to evaluate whether the actual performance of the organization differs significantly from the standards of performance that assess the organization is

Accepted Answer

Comparing actual performance to the standards is the step where managers evaluate if there is a significant difference between what was planned and what was achieved.

Question 2

The manager of 24-7, a convenience store, keeps track of the average sale amount for each customer as a way of deciding on the product mix to be carried in the store. This is an example of ________ control.

Accepted Answer

Output control involves measuring the results of activities, such as the average sale amount per customer, to guide decision-making and improve performance.

Question 3

Amir, the manager of Kaleidoscope Toys, installed new machinery to speed up the production process after the assigned targets were not achieved for the third week of the month. With regard to the control process, Amir is

Accepted Answer

Amir is initiating corrective actions by installing new machinery to address the issue of not meeting production targets.

Question 4

Charlene, the manager of CraftRite Leather Goods, checked the weekly records and discovered that the number of handbags produced in one week by 45 employees was 375 against the set target of 450 handbags. With reference to the control process, Charlene is

Accepted Answer

Charlene is comparing the actual performance (375 handbags) against the set target (450 handbags) to assess if the employees met the production goals.

Question 5

The current assets of Kaiser Investments are valued at $25 million and its current liabilities are at $6 million. If its inventory is worth $1 million, what is its quick ratio?

Accepted Answer

Quick ratio = (Current assets - Inventory) / Current liabilities= (25 million - 1 million) / 6 million= 24 million / 6 million= 4

Question 6

In which of the following situations do you think it would be most challenging for a manager to measure employee outputs or behavior?

Accepted Answer

Measuring the creative output of graphic designers is challenging because creativity and design quality are subjective and harder to quantify compared to tasks with clear, measurable outputs.

Question 7

Martel, the production manager of Firefly Shoes, sets a production target of 220 shoes to be distributed among 20 employees in a week. In the context of the control process, Martel

Accepted Answer

Martel is establishing the standards of performance by setting a production target of 220 shoes for the employees.

Question 8

The standard of performance that measures efficiency at the corporate level of the organization is known as

Accepted Answer

Operating costs measure efficiency at the corporate level as they reflect the expenses related to the day-to-day functioning of a business, indicating how well resources are being utilized.

Question 9

Which of the following activities might a manager perform if he or she is at the final stage of the control process?

Accepted Answer

At the final stage of the control process, a manager evaluates performance against standards and decides whether corrective action is needed to meet those standards.

Question 10

The final step in the control process is

Accepted Answer

The final step in the control process is to evaluate the results and initiate corrective action if necessary, to ensure that the organization's goals are achieved.

Question 11

The managers of Sputnik Diner, a fast food restaurant, record outputs on a daily basis by counting how many customers their employees serve, the time each transaction takes, and how much money each customer spends every day. With reference to the control process, the managers of Sputnik are

Accepted Answer

The managers are measuring the actual level of performance by recording daily outputs such as the number of customers served, transaction times, and money spent.

Question 12

The financial ratio that measures the ability of the organization to pay its short-term debts is the ________ ratio.

Accepted Answer

Liquidity ratio measures the ability of the organization to pay its short-term debts.

Question 13

The sales of Audiophile, a manufacturer of home and professional audio systems, have been declining noticeably over the last several quarters. Muaad, the CEO, meets with several managers, including Bruno, the head of the customer service department, and Ilya, a customer response team leader. It is determined that, while the company's quality and innovation standards are being met and even exceeded, its customer service is not performing as well as it should be. Muaad decides to implement a goal of raising the quality of Audiophile's interactions with customers by their next quarterly meeting. Given what you know about the control process, what should the team at Audiophile do next?

Accepted Answer

The answer of The sales of Audiophile, a manufacturer of...

Question 14

An organization's net income before taxes divided by the total assets of the organization is known as

Accepted Answer

Return on investment (ROI) is a financial ratio that measures the amount of return on an investment relative to the investment's cost. It is calculated by dividing the net income before taxes by the total assets of the organization.

Question 15

The manager of East India Ice Cream Shop keeps track of the number of customers served at different periods of the day in an attempt to plan a schedule for workers that matches the demand for the restaurant's products. By using this tracking system, the manager of East India is utilizing ________ control.

Accepted Answer

Output control involves measuring the results of activities, such as the number of customers served, to assess performance and make decisions.

Question 16

The most commonly used financial performance measure that allows managers of one organization to compare performance with that of other organizations is

Accepted Answer

Return on investment (ROI) is a widely used financial performance measure that allows managers to compare the efficiency of different investments or the performance of different organizations by evaluating the return generated relative to the investment cost.

Question 17

The CEO of a company would like to know whether his managers can pay off claims of short-term creditors without selling inventory. What ratio will help him understand the company's liquidity?

Accepted Answer

The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets, excluding inventory.

Question 18

Constantinople Trading Co., a manufacturer of home decor goods, sets up a system to monitor unit sales of its products to measure changes taking place in customer tastes and the possible resulting impact on future sales. With this system, Constantinople is using ________ control.

Accepted Answer

Feedback control involves monitoring outputs or results to determine if they meet the desired standards or objectives, which is what Constantinople Trading Co. is doing by tracking unit sales to assess customer preferences and predict future sales.

Question 19

The ratio that is computed by dividing the difference between current assets and inventory by current liabilities is the ________ ratio.

Accepted Answer

The quick ratio is calculated by dividing the difference between current assets and inventory by current liabilities.

Question 20

The performance ratio that measures the efficiency of the organization in terms of how well the resources of the organization have been used to generate profit is a(n)________ ratio.

Accepted Answer

Profit ratios measure how efficiently a company uses its resources to generate profit.

Quiz 8: Control, Change, and Entrepreneurship