62. In a
responsibility accounting system, costs are classified into categories on the
basis of

a. fixed and variable costs.
b. prime and overhead costs.
c. administrative and nonadministrative costs.
d. controllable and noncontrollable costs.

63. When used
for performance evaluation, periodic internal reports based on a responsibility
accounting system should not

a. be related to the organization chart.
b. include allocated fixed overhead.
c. include variances between actual and budgeted controllable costs.

d. distinguish between controllable and noncontrollable costs.

64. A ____ is
a document that reflects the revenues and/or costs that are under the control
of a particular manager.

a. quality audit report
b. responsibility report
c. performance evaluation report
d. project report

65. The cost
object under the control of a manager is called a(n) ____ center.

a. cost
b. revenue
c. responsibility
d. investment

66. In
evaluating the performance of a profit center manager, he/she should be
evaluated on

a. all revenues and costs that can be traced directly to the unit.

b. all revenues and costs under his/her control.
c. the variable costs and the revenues of the unit.
d. the same costs and revenues on which the unit is evaluated.

67. If a
division is set up as an autonomous profit center, then goods should not be transferred

a. in at a cost-based transfer price.
b. out at a cost-based transfer price.
c. in or out at cost-based transfer price.
d. to other divisions in the same company.

68.
Performance evaluation measures in an organization

a. affect the motivation of subunit managers to transact with one
another.
b. always promote goal congruence.
c. are less motivating to managers than overall organizational goals.

d. must be the same for all managers to eliminate suboptimization.

69. A
management decision may be beneficial for a given profit center, but notfor the entire company. From the
overall company viewpoint, this decision would lead to

a. goal congruence.
b. centralization.
c. suboptimization.
d. maximization.

70. A major
benefit of cost-based transfers is that

a. it is easy to agree on a definition of cost.
b. costs can be measured accurately.
c. opportunity costs can be included.
d. they provide incentives to control costs.

71. An
internal reconciliation account is not
required for internal transfers based on

a. market value.
b. dual prices.
c. negotiated prices.
d. cost.