Planificación y control de gestión (inglés)

Choose the type of RC which better fits to a research and development (I+D) department in a firm. Engineered expense centre. Investment centre. Discretionary expense centre. all of them could be good election. None of them are a good election.

The economic value added (EVA) is used to evaluated a(n). Revenue centre. Profit centre. Investment centre. All of them are correct. None of them are correct.

Related to the controllability principle, choose the true assertion: It is easy to differentiate between the controllable item and the incontrollable one in order to measure the manager’s performance. It lead the organization to ethical problems due to the controller relationship within the organization. Revenues, costs and investment that do not fall under manager’s control must be excluded when evaluating his/her department. All of them are true. None of them are correct.

One of the disadvantages of the negotiated price in setting up a transfer price. Is the consumed time to make a decision. Is that depends deeply on the negotiation skills of managers. Is that it could lead the organization to centralized decision making. All of them are disadvantage of NC. None of them are disadvantage of NC.

EPS (earning per share) and EVA (earning value added) are commonly known as…. Key financial measure used in the financial perspective for non-for-profit organization. Key financial measure linked to firm’s accounts. Key financial measures linked to firm’s stock market information. All of these statement are true. None of these statement are true.

A weakness (debilidad) of traditional scorecard is: That is focused on short-term value creation. That the performance analysis is based on past result instead of future strategic. That is focused mainly on resource allocation. All of them are weakness of traditional scorecard. None of them are correct.

Regarding the statements show below about the balanced scorecard choose the correct one. The customer perspective must focus on the firm’s personnel capabilities and knowledge to undertake all the firm’s internal processes. The balanced scorecard focuses only on financial indicators. The different objectives integrated in the balanced scorecard must lead to attain the objectives of the internal processes perspective. All of aforementioned statement are correct. None.

Which of the following statements is true regarding management control discipline?. RC are a key element of a management control system. Budget is one of the most important tools of management control. The content of planning in management control relies heavily on the strategic. All of the statement…. None.

Considering responsibility centers, choose the correct statement. Engineered expense centers are expense centers devoted only to make possible the functioning of the firm. Discretionary expense centers are expensive centers for which it’s not clear the relationship between the inputs those centers have to use and the output they have to get. Investment centers are essentially responsibility centers whose main function consists only of building the basic infrastructure of the firm. All the aforementioned…. None….

Select the correct alternative. Regarding efficiency, standard cost per product unit can be a correct objective for an engineered expense centre. The quality of the output can be a correct objective for a discretionary expense centre. Profit can be an appropriate objective for a profit centre. ROI and EVA can be suitable indicators for an investment center. All the aforementioned statement are correct.

Regarding RC determine which statement is correct. Each type of responsibility center requires a different type of objectives. Goal congruence criterion indicates that when a responsibility centre is trying to attain its objective, it must be at the same time contributing directly to fulfils the overall objectives of the firm. When designing the objectives of a responsibility centre, only variables that are under the control of this centre must be considered. All. None.

Regarding again RC identify the correct statement. The TCM can be used as an objective for a revenue center. The acquisition cost of raw materials is an example of a discretionary cost. Most of marketing expenses that are generated after the sale has been done are usually discretionary cost. All. None.

In respect of transfer price, indicate which statement is right. Negotiated transfer prices is a simple and easy approach to be applied in the practice. The opportunity cost consist basically of the fixed cost of the firm. The full cost usually represents or coincides with the opportunity cost. The need of transfer price is the firm is a consequence of both decentralization in the making decision process and the exchange of good and/or service among responsibility centers. none.

considering the balanced scorecard select the correct option. Objectives must be only for the financial perspective. The rest of the perspectives only contain indicators and targets for these indicators. One of it’s main objectives or purpose is to specify and to clarify strategic. When designing the BS for a particular firm it must be decided to use either objectives or indicators. All. None.

Indicate which statement about performance measures is correct. The more indicators are used, the more effective the control will be. Choosing a performance measure or indicators must be direct consequence of having set previously an objective. When defining performance measures, monetary ones must predominate. Performance measures or indicators must be always quantitative. All.

Regarding the statement shown bellow about transfer price, choose the correct one. Negotiated transfer price must be used when the product does not have external market. If there is perfect competition, the correct transfer price is the variable cost price. To have goal congruence, the transfer prices have to be based on opportunity cost. The opportunity cost of the seller division is the maximum price at which that unit is willing to buy that product at the market. All the aforementioned statement are correct.

Considering the statements show below, and in the case of a maintenance department (engineering expense center) choose the correct one. Efficiency cannot be assessed. A suitable objective for effectiveness could be the cost that a unit incurs. As it is an engineered expense center, only efficiency must be evaluated. All. None.

Regarding the statement shown below choose….. Efficiency and effectiveness are two dimensions that have to be considered when setting objective to a responsibility center. Profit center can enjoy a higher degree of autonomy than an expense center. Objectives of investment center must consider the resources invested in those units. All. None.

Regarding the statements shown below, choose the correct one: Efficiency and effectiveness are the two dimensions that have to be considered when setting up objectives to a RC. Profit centers can enjoy a higher degree of autonomy than an expense center. Objectives for investment centers must consider the resources invested in those units. All. None.

Regarding the statements shown below, choose the correct one: When designing an objective for a RC controllability and goal congruence are the main principles that have to be considered. A manufacturing department must have as an objective only a standard cost per product unit. The objective of a marketing department must be set up exclusively in term of sales in product units. All. None.

In New Jersey Company case the Individual Loan Section has basically to check all the loan instruments that have been bought by the firm for the legal aspects. It can be considered an engineered expense center. The case explains that this section is assessed by comparing the budgeted total expenses to the actual ones. Choose the correct answer: The way this unit is assessed is correct. To measure correctly the efficiency of this unit, only labor cost must be considered. To measure correctly the efficiency of this unit, the budget should be adapted to the actual level of activity. The assessment of efficiency should be based on any indicator related to the quality of its output. Effectiveness must not be evaluated for this type of units.

Considering the statements show below, and in the case of a Procurement Department (that is in charge of purchasing for example raw material), choose the correct one: Efficiency cannot be assessed. When assessing its efficiency only and exclusively the raw materials cost must be considered. As it is an engineered expense center, only efficiency must be evaluated. A possible indicator for the effectiveness objective could be one related to the quality of the raw materials bought by this unit. All the aforementioned statements are correct.

Lag measures in Balanced Scorecards: Are related to outcomes. Are at the lowest levels of strategic objectives. Are drivers. All of them are correct. None of them are correct.

Regarding these statements show below, choose the correct one: In Management Control, Goal Congruence means that all the objectives have to be defined in financial terms. In Management Control, Goal Congruence means that any responsability center must have at least one objective. In Management Control, it's said that there is a Goal Congruence when a responsability center trying to attain its objectives is clearly contributing to the overall objectives of the firm. All the aforementioned statements are correct. None of the statements are correct.

the goal congruence in an organization can be affected by: The organizational culture. The social norms. The managerial style. All of them possible factors which affect GC. None.

the strategic formulation is…. ...part of the firm’s planning and control system. ...the process of ensuring effectiveness and efficiency of tasks carried out in a firm. ...often a mechanical process. All of them are correct. None of them are correct.

Choose the type of RC which better fits to a research and development department in a firm. Engineered expense centre. Investment centre. Discretionary expense centre. all of them could be good election. None of them are a good election.

the economic value added (EVA) is used to evaluated a(n). Revenue centre. Profit centre. Investment centre. All of them are correct. None of them are correct.

related to the controllability principle, choose the true assertion: It is easy to differentiate between the controllable item and the incontrollable one in order to measure the managers performance. It lead the organization to ethical problems due to the controller relationship within the organization. Revenues cost and investment that do not fall under manager’s control must be excluded when evaluating his/her department. All of them are true. None of them are correct.

EPS (earning per share) and EVA (earning value added) are commonly known as…. Key financial measure used in the financial perspective for non-for-profit organization. Key financial measure linked to firm’s accounts. Key financial measures linked to firm’s stock market information. All of these statement are true. None of these statement are true.

lag measures in balanced scorecard. Are related to outcomes. Are at the lowest level of strategic objectives. Are drivers. All of them are correct. None of them are correct.

regarding the statements show below about the balanced scorecard choose the correct one. The customer perspective must focus on the firm’s personnel capabilities and knowledge to undertake all the firm’s internal processes. The balanced scorecard focuses only on financial indicators. The different objectives integrated in the balanced scorecard must lead to attain the objectives of the internal processes perspective. All of aforementioned statement are correct. None.

regarding the statement show below about budgeting, choose the correct one. The budget must never be used to evaluate the responsibilities centers. The budget is not approved by top manager. Coordination among managers is not especially necessary when doing the budget. All the aforementioned…. None of the statement….

which of the following statements is true regarding management control discipline?. RC are a key element of a management control system. Budget is one of the most important tools of management control. The content of planning in management control relies heavily on the strategic. All of the statement…. None…..

regarding again RC identify the correct statement. The TCM can be used as an objective for a revenue centers. The acquisition cost of raw materials is an example of a discretionary cost. Most of marketing expenses that are generated after the sale has been done are usually discretionary cost. All of them…. None….

select the correct statement about the variance analysis. The addition of all the variances is equal to the actual profit earned by the firm. It explains absolutely the ultimate or final causes of the variances so it not necessary further analysis about them. It determines the economic importance of each variance. It’s not necessary to have done previously a budget. All the….

in respect of transfer price, indicate which statement is right. Negotiated transfer prices is a simple and easy approach to be applied in the practice. The opportunity cost consist basically of the fixed cost of the firm. The full cost usually represents or coincides with the opportunity cost. The need of transfer price is the firm is a consequence of both decentralization in the making decision process and the exchange of good and/or service among responsibility centers. None.

considering the balanced scorecard select the correct option. Objectives must be only for the financial perspective. The rest of the perspectives only contain indicators and targets for these indicators. One of it’s main objectives or purpose is to specify and to clarify strategic. When designing the BS for a particular firm it must be decided to use either objectives or indicators. All. None.

Which of the following statements is true regarding Task Control?. TC is highly focused on organizational units performance to determine how well the tasks have been done. TC is a process throught wich the organization´s strategic objectives are implemented. TC can rely on the scientific method to produce the different measures that will be put intro practice the following year. TC always needs person-to-person interaction. All the statements are correct.

Determine the correct alternative for Planning and Control disciplines: The budget is the only tool or method used in Management Control. The conclusions of the control phase in Management Control must never be used to build the organization´s plans and objectives. Both Management Control and Strategy Formulation must be narrowly connected. All the statements are correct. None of the statements is correct.

Select the correct statement about Budgeting: The program budgeting includes always a single financial plan for each program, with no alternative options considered in its preparation. To finish the budget, the investment plan needs to be considered, including the working capital. In budgeting, the profit wheel is the only one important in that process. All the statements are correct. None of the statements is correct.

Considering Variance analysis, choose the correct statement: It explains absolutely the ultimate or final causes of the variances, so it is not necessary to do further analysis about them. The addition of all the variances is equal to the actual profit earned by the firm. The results found in the variance analysis will not only help to evaluate the company´s performance, but they can also be used to support the planning of future periods. All the statements are correct. None.

For Responsibility Centres, choose the correct statement: Being different, RCs need the same performance measures to asses them. Only the expenses that can be under control will be considered when formulating the objectives of the RCs. Both the criterion of goal congruence and controllability are related to the degree of effiency an RC could developed when managing its objectives. All the statements are correct. None of them is correct.

The Balance Scorecard, select the correct option: Onjectives must be set only for the financial perspective as profit shouud be the main objective under any circustance. It is a flexible tool that can be implanted by large, medium, and small companies to ensure the achievemt of the profit objective for their shareholders. One benefit of the BSC is that the company will have a measuremen system of the operational task or activities to be carried out in the next years. All. None.

Related to the case study Gymnasio´s, this firm "aspires to be a leader in the sports services industry in the Canary Islands, becoming a references for all sports fans and other companies in the sector". With this objecive in mind, select the correct statement: The company shoul asses its performance by comparing its market share with that of its competitor, among other indicators. To strengthen goal congruence, this firm needs to set up objectives and indicators aligned whit the firm´s ultimate goal. The managers shoul structure the firm ro control and reach this objective. All. None.

Regarding Transfer Pricing, indicate wich statement is correct: The need to transfer prices in the firm is a consequence of both decentralization in making decisions and the exchange of goods and/or services among responsibility centres. The TP that the company uses for the internal exchanges of products does not affect the assessment of the RCs that participate in that exchange. The full cost usually represents or coincides whit the opportunity cost. Negotiated TP is a simple and easy approach to be applied in practice. None.

According to the elements of any control system, the element that determines the significance of what is actually happening by comparing it with a standard or expectation is called: Detector. Assessor. Effector. Comunication network.

Regarding the core elements of any control system described in Lesson 1, which of the following statements is CORRECT?. The Effector is the element that determines the significance of what is happening by comparing it with a standard. The Detector always acts automatically to alter behavior without requiring an administrative network. The Assessor measures what is actually happening in the organization. The Communication Network transmits information between the detector and the assessor, and between the assessor and the effector. None of the options is correct.

Management Control Systems (MCS) differ from Strategic Formulation and Task Control. Which of the following best describes a characteristic of Management Control?. It is completely unsystematic and focuses exclusively on long-term, multi-year goals. It is the process by which managers at all levels ensure that the people they supervise implement the organization's strategy. It focuses only on manufactured goods and does not involve any human psychological behavior or alignment. It is a short-term process designed to ensure that specific tasks are carried out efficiently on a day-to-day basis. Both B and D are correct characteristics of Management Control.

In an Engineered Expense Center, inputs can be measured in monetary terms and outputs can be measured in physical terms. Which of the following statements is TRUE regarding this type of center?. The optimal amount of cost required to produce one unit of output can be estimated with high reliability. It is primarily evaluated based on its financial efficacy rather than its operational efficiency. A legal department or a public relations office is a classic example of an Engineered Expense Center. Budget variances in this center are always interpreted as a measure of management's strategic vision. Statements A and B are correct.

Discretionary Expense Centers present unique control challenges. Which of the following statements regarding these centers is FALSE?. The budget represents a managerial judgment regarding the maximum amount that should be spent. Financial control is achieved primarily by ensuring that the actual expenses do not exceed the approved budget. There is a clear, statistically proven causal relationship between the inputs injected and the quality of the outputs obtained. Administrative, legal, and human resources departments are typically classified under this category. Operational efficiency cannot be measured mathematically in the same way as in a manufacturing plant.

When an organization decides to decentralize and create independent Profit Centers, it expects several advantages. However, certain disadvantages also arise. Which of the following is a recognized DISADVANTAGE of Profit Centers?. It slows down operational decision-making because business unit managers gain too much autonomy. It might lead to friction and arguments between different units regarding the allocation of shared corporate costs or transfer prices. It prevents top management from using divisional net income as a tool to evaluate performance. It reduces the training grounds for general management because decisions are centralized. Both B and C are correct disadvantages.

A company is evaluating the performance of one of its business units. The corporate accountant presents the following metrics: Contribution Margin, Direct Profit, Controllable Profit, and Income Before Taxes. If corporate headquarters wants to evaluate the specific performance of the Business Unit Manager (focusing only on expenses they can influence), which metric is the most appropriate?. Contribution Margin. Direct Profit. Controllable Profit. Income Before Taxes. None of the options is correct, as managers are always evaluated on final Net Income.

To achieve goal congruence, an ideal Market-Based Transfer Pricing system requires certain conditions to be met. Which of the following is NOT one of these conditions?. Business unit managers must be competent and treat internal and external buying/selling with equal importance. There must be a perfectly competitive, liquid external market for the product being transferred. Business unit managers must have the freedom to buy from outside suppliers if the internal price is too high. Central management must intervene frequently and dictate the exact prices to avoid conflicts between divisions. Information about available market prices and costs must be fully transparent and symmetric.

Consider the following financial data for a division: Net Operational Profit = $450,000; Total Assets = $3,500,000; Current Liabilities = $500,000. The corporate Weighted Average Cost of Capital (WACC) is 12%. If the capital base is defined as Net Assets (Total Assets minus Current Liabilities), what is the Economic Value Added (EVA)?. $30,000. $90,000. $420,000. $360,000. None of the options is correct.

Why is Economic Value Added (EVA) generally preferred over Return on Investment (ROI) to evaluate the performance of an Investment Center manager?. Because ROI completely ignores the cost of capital, whereas EVA does not include any operational profits. Because a manager evaluated under ROI might reject a project with a return higher than the corporate cost of capital if it dilutes the division's exceptionally high current ROI. Because EVA allows all corporate asset investments to be depreciated instantly, increasing current profits. Because ROI cannot be calculated if the division has current liabilities. Both B and D are correct.

A manager of an Investment Center wants to maximize their division's Economic Value Added (EVA) before the end of the fiscal year. Which of the following strategic actions would directly achieve an INCREASE in EVA?. Increasing the amount of safety inventory held in warehouses, financed by long-term corporate debt. Disposing of or selling obsolete machinery that generates zero profit but is currently included in the capital base. Rejecting a new investment opportunity that offers a 15% return when the company's cost of capital is 10%. Accelerating expenses in discretionary research and development without changing sales projections. Statements B and C are correct.

Regarding the differences between Strategy Formulation, Management Control, and Task Control, which of the following statements is FALSE?. Strategy Formulation focuses on the long-term goals and broad strategies of the firm, and it is usually unsystematic. Task Control is highly systematic, repetitive, and focuses on specific, day-to-day operational tasks. Management Control acts as a bridge between Strategy Formulation and Task Control. Task Control involves a heavy psychological interaction among managers to ensure goal congruence, whereas Management Control is purely automated and mechanical. None of the options is correct (all statements are true).

If a Responsibility Center achieves its planned outputs using fewer inputs than originally budgeted, we can strictly conclude that the center has been: Effective, but not necessarily efficient. Efficient, regardless of whether it achieved its strategic objective or not. Both efficient and effective in all organizational dimensions. Neither efficient nor effective because it deviated from the budget. Statements A and B are correct.

An Investment Center has a current Return on Investment (ROI) of 18%. The corporate Cost of Capital (WACC) is 12%. The manager is considering a new project that offers an expected return of 14%. Which of the following statements correctly describes the manager’s decision bias depending on the performance metric used?. If evaluated by ROI, the manager will ACCEPT the project; if evaluated by EVA, the manager will REJECT it. If evaluated by ROI, the manager will REJECT the project; if evaluated by EVA, the manager will ACCEPT it. The manager will accept the project under both metrics because 14% is higher than the cost of capital. The manager will reject the project under both metrics because 14% is lower than the current ROI of 18%. Under EVA, the project cannot be evaluated because we do not know the absolute dollar value of the investment.

Division A wants to transfer a component to Division B. Division A operates at FULL CAPACITY and can sell its component in a perfectly competitive external market for $50. The variable cost to produce it is $30. According to the general rules of Transfer Pricing to guarantee goal congruence, what is the minimum transfer price that Division A should accept?. $30 (The variable cost). $20 (The opportunity cost of lost external sales). $50 (The market price, which includes variable cost plus opportunity cost). $0 (Internal transfers should always be free to maximize total company profit). None.