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Exam 10: Managerial Controls

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Question 31

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The Industry Leader (Scenario) Frank,the new CEO for First Fidelity,is working hard to turn around the formerly successful real estate business.His goal is to make First Fidelity a leader in the industry.He understands the importance of improving organizational productivity in achieving his goals.Mark is keen to improve organizational performance and effectiveness. -Ruth identifies the firm's leverage ratio to be very high.What suggestion could Ruth give to help the firm reduce its leverage ratio?

A) Increase the money supply by selling a part of its assets.
B) Pay back part of its debts to improve the ratio.
C) Maintain more current assets than current liabilities.
D) Reduce the sales to total assets ratio of the firm.

E) All of the above
F) A) and D)

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Question 32

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Statco's Control (Scenario) Statco,Inc.,is a statistical software company based in Columbia,TN.This publicly traded firm has grown in a systematic fashion over its 25-year existence and now claims more than 12,000 employees worldwide.As it has grown,the company has adopted a hierarchical structure,which emphasizes organizational authority.Management relies heavily on administrative rules,regulations,and policies in order to meet its goals.However,the company has struggled to meet projected revenues for each of the past 10 quarters.The firm hires Mark Adams,an expert in control system design,to design a control system and offer suggestions to improve the firm's performance. -Mark wants to formulate a control process for the organization.What should be the first step in the control process?

A) carrying out performance comparison
B) determining the actual performance
C) developing a benchmark
D) validating the performance standard

E) A) and B)
F) B) and C)

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Question 33

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Statco's Control (Scenario) Statco,Inc.,is a statistical software company based in Columbia,TN.This publicly traded firm has grown in a systematic fashion over its 25-year existence and now claims more than 12,000 employees worldwide.As it has grown,the company has adopted a hierarchical structure,which emphasizes organizational authority.Management relies heavily on administrative rules,regulations,and policies in order to meet its goals.However,the company has struggled to meet projected revenues for each of the past 10 quarters.The firm hires Mark Adams,an expert in control system design,to design a control system and offer suggestions to improve the firm's performance. -Which of the following is a key activity that the proposed control system should perform?

Managers should do nothing if the variance observed from the standard is acceptable.

Employee Theft (Scenario) Barbara is the product manager of an energy company which operates in the Americas.She is concerned about the increased employee theft observed in the factory.A study has shown that $30,000 worth of merchandise was accounted to employee theft in the year 2010. -Barbara wants to take corrective measures to prevent future theft.Which of the following is a feedback tactic that Barbara could use to control theft?

Managers engage in controlling activities to protect the organization and its assets.

Fraudulent filing of expense reports is an example of ________.

The Sarbanes-Oxley Act also called for more disclosure and transparency of corporate financial information.

The earthquake/tsunami which hit Japan in March of 2011 highlights the contemporary need to design organizational controls for ________.

A service profit chain is the service sequence from employees to customers to profit.

Managers tend to use more direct supervision and highly centralized decision making for control in less technologically advanced countries.

Organizational effectiveness is a measure of how appropriate organizational goals are and how well those goals are being met.

Which of the following is considered the most desirable type of control to prevent anticipated problems?

The Industry Leader (Scenario) Frank,the new CEO for First Fidelity,is working hard to turn around the formerly successful real estate business.His goal is to make First Fidelity a leader in the industry.He understands the importance of improving organizational productivity in achieving his goals.Mark is keen to improve organizational performance and effectiveness. -Charles discovers major flaws in the packaging department.He consults the production manager and formulates control measures to improve packaging.Here,Charles is using the ________ control.

The Industry Leader (Scenario) Frank,the new CEO for First Fidelity,is working hard to turn around the formerly successful real estate business.His goal is to make First Fidelity a leader in the industry.He understands the importance of improving organizational productivity in achieving his goals.Mark is keen to improve organizational performance and effectiveness. -Ruth wants to analyze the organization's ability to meet its current debt obligations.Which of the following ratios is most helpful to Ruth in analyzing this?

Which of the following is an example of a feedforward control measure used to control possible workplace violence?

Job uncertainties and employee stress are factors that contribute to workplace violence.

In order to increase the ratio of outputs to inputs,a manager would have to ________.

If a manager investigates how and why performance has deviated beyond the acceptable range of variation,and then corrects the source of the deviation,she is using ________.

An organization hires additional personnel as soon as they get a major contract.The organization is using ________ control.