Multiple choice

1. Identify which of the following is not a characteristic of a management control system. 

a. A management control system aids and coordinates the process of making decisions. 

b. A management control system encourages short term profitability. 

c. A management control system motivates individuals throughout the organization to act in concert. 

d. A management control system coordinates forecasting sales and cost driver activities, budgeting, and measuring and evaluating performance. 

2.  Identify which of the following statements regarding responsibility centers is false. 

a. Responsibility centers usually have one objective. 

b. Management control systems monitor responsibility center objectives. 

c. Responsibility centers are usually classified according to their financial

responsibility. 

d. Cost centers, profit centers, and investments centers are all examples of responsibility centers.

3. A management control system must _____ to achieve maximum benefits at minimum cost. 

a. look at the short term only 

b. motivate managers with quarterly bonuses based on performance 

c. foster goal congruence and managerial effort 

d. be the same as the financial accounting system 

4.  An uncontrollable cost _____. 

a. should be ignored in evaluating the responsibility center manager's performance 

b. is influenced by a manager's decisions and actions 

c. tells a great deal about a manager’s decision-making abilities 

d. is the same as a sunk cost