Reference no: EM13584618

All of the following questions are True / False questions.

1. One potential problem with using return on investment (ROI) to evaluate performance is that a manager can make decisions that lower overall organizational performance, but increase the manager%u2019s reported performance.

2. In evaluating the viability of a investment project, the use of residual income instead of return on investment (ROI) will eliminate any suboptimization problems.

3. A key feature of an optimal transfer price between an organization%u2019s responsibility centers is that the price chosen should have no effect on the total overall profits of the organization.

4. When dual transfer prices are used between responsibility centers, the selling division is provided with a profit while the buying division is only charged for costs.

5. When negotiated transfer prices are used between responsibility centers, the autonomy of divisional managers is preserved.

6. The material mix variance plus the material yield variance equals the material efficiency variance.

7. The budget variance for fixed manufacturing overhead costs is the difference between the actual fixed manufacturing overhead costs and the budgeted fixed manufacturing overhead costs on the master budget.

8. To maintain fairness and consistency, all managers in a given organization should be evaluated using the same financial and nonfinancial measures.

9. One important guideline of benchmarking is to not benchmark everything at the best-in-the-business level; no organization can be the best at everything.

10. In order to be effective, nonfinancial performance measures must be directly linked to organizational goals and strategy.