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Managerial
Accounting, 3e
(Braun/Tietz)Cha
pter 10 Performan
ce Evaluation
1) There are two types
of responsibility
centers.Answer:

FALSEDiff: 1LO: 101EO : S10-1AA S!:

"eflecti#e
Thin$in%Learnin%
O&tco'e: Disc&ss
responsibility
acco&ntin%()
"esponsibility
acco&ntin%
perfor'ance reports

co'pare b& %ets

with act&al res&lts
for each responsibility
center.Answer:
T"*EDiff: 1LO: 101EO : S10-1AA S!:
"eflecti#e
Thin$in%Learnin%
O&tco'e: Disc&ss
responsibility

acco&ntin%+) ,oal
con%r&ence is a
syste' for
e#al&atin% the
perfor'ance of each
responsibility center
an
its 'ana%er.Answer:
FALSEDiff: 1LO: 101EO : S10-1AA S!:

"eflecti#e
Thin$in%Learnin%
O&tco'e: Disc&ss
responsibility
acco&ntin% ) A
profit center is
a responsibility center
in which a 'ana%er is
acco&ntable for costs
only

.Answer: FALSEDiff:
1LO: 10-1EO : S101AA S!: "eflecti#e
Thin$in%Learnin%
O&tco'e: Disc&ss
responsibility
acco&ntin% )
/ro &ct lines are
%enerally
consi ere profit

centers.Answer:
T"*EDiff: 1LO: 101EO : S10-1AA S!:
"eflecti#e
Thin$in%Learnin%
O&tco'e: Disc&ss
responsibility
acco&ntin%
1 opyri%ht (01+
/earson E &cation

2nc. p&blishin% as
/rentice 3all

4) 5ost co'panies
consi er i#isions to
be in#est'ent
centers.Answer:
T"*EDiff: 1LO: 101EO : S10-1AA S!:
"eflecti#e
Thin$in%Learnin%

O&tco'e: Disc&ss
responsibility
acco&ntin%6)
5ana%e'ent by
e7ception irects
'ana%e'ent8s
attention to i'portant
ifferences between
act&al an
b& %ete a'o&nts.A

nswer: T"*EDiff:
1LO: 10-1EO : S101 AA S!: "eflecti#e
Thin$in%Learnin%
O&tco'e: Disc&ss
responsibility
acco&ntin%9)
2n#esti%atin%
si%nificant #ariances
fro' a b& %et

to assi%n
responsibility is an
e7a'ple of 'ana%e'ent
bye7ception.Answer:
T"*EDiff: 1LO: 101EO : S101 AA S!: "eflecti#e
Thin$in%Learnin%
O&tco'e: Disc&ss
responsibility

acco&ntin% ) S'all
co'panies ten to &se
ecentrali;e
ecision
'a$in%.Answer:
FALSEDiff: 1LO: 101EO : S10-+AA S!:
"eflecti#e
Thin$in%Learnin%
O&tco'e: Disc&ss

responsibility
acco&ntin%10)
o'panies that
ecentrali;e split their
operations into
ifferent i#isions or
operatin%
&nits.Answer:
T"*EDiff: 1LO: 101EO : S10-+AA S!:

"eflecti#e
Thin$in%Learnin%
O&tco'e: Disc&ss
responsibility
acco&ntin%
( opyri%ht (01+
/earson E &cation
2nc. p&blishin% as
/rentice 3all

11) Decentrali;ation
allows top 'ana%e'ent
to concentrate on
lon%-ter' strate%ic
plannin%.Answer:
T"*EDiff: 1LO: 101EO : S10-+AA S!:
"eflecti#e
Thin$in%Learnin%
O&tco'e: Disc&ss

responsibility
acco&ntin%1()
Decentrali;ation
allows top 'ana%e'ent
to hire wor$ers with
e7pert $nowle %e
for each b&siness
&nit.Answer:
T"*EDiff: (LO: 101EO : S10-+AA S!:

"eflecti#e
Thin$in%Learnin%
O&tco'e: Disc&ss
responsibility
acco&ntin%1+)
Decentrali;ation 'ay
&plicate a
co'pany8s costs since
each b&siness &nit
'ay for

e7a'ple ha#e its

own p&rchasin%
epart'ent.Answer:
T"*EDiff: (LO: 101EO : S10-+AA S!:
"eflecti#e
Thin$in%Learnin%
O&tco'e: Disc&ss
responsibility
acco&ntin%1 ) ,oal

incon%r&ence
fre<&ently e7ists in
ecentrali;e
or%ani;ations.Answer
: T"*EDiff: 1LO: 101EO : S10-+AA S!:
"eflecti#e
Thin$in%Learnin%
O&tco'e: Disc&ss
responsibility

acco&ntin%1 )
D&plication of costs
is a isa #anta%e of
ecentrali;e
or%ani;ations.Answer
: T"*EDiff: 1LO: 101EO : S10-+AA S!:
"eflecti#e
Thin$in%Learnin%
O&tco'e: Disc&ss

responsibility
acco&ntin%
+ opyri%ht (01+
/earson E &cation
2nc. p&blishin% as
/rentice 3all
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