The components of an effective output control system are:
A)Capital budget planning, evaluation of results, and corrective action taken when necessary
B)Objective financial measures, performance standards derived from goals, and appropriate operating budgets
C)Subjective financial measures, performance standards derived from goals, and appropriate operating budgets
D)Cost budget analysis, divisional goals, and performance standards
E)None of these choices are correct

Question

Quizplus · Accepted Answer

Objective financial measures, performance standards derived from goals, and appropriate operating budgets are essential components of an effective control system. This allows for clear benchmarks and goals to be set and tracked, as well as the financial data to evaluate performance and make necessary adjustments. Capital budget planning and divisional goals may also be important, but they are not as central to the control system as the components listed in choice B. Subjective financial measures are not as reliable as objective ones, and may not provide an accurate picture of performance. Choice E is incorrect as there is a correct choice in the options.

The Components of an Effective Output Control System Are