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Unformatted text preview: Chapter 1 Q&A Q1. How is control achieved and how does it pertain to managers and operations? (Chapter 1 Section 1) A1. Control is achieved by evaluating the performance of managers and the operations for which they are responsible. Managers are evaluated to determine how their performance should be rewarded or punished, which in turn motivates them to perform at a high level. Operations are evaluated to provide information as to whether they should be changed or modified or remain the same. Q2. Explain the concept of management by exception. (Chapter 1 Section 1) A2. Typically, managers follow the principle of management by exception when using performance reports. This means that managers investigate departures from the plan that appear to be exceptional, but they do not investigate minor departures from the plan. Q3. What is the difference between variable costs and fixed costs? Give examples of both. (Chapter 1 Section 2) A3. Variable costs increase or decrease in proportion to increases or decreases in the level of business...
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This note was uploaded on 02/04/2011 for the course ACG 2071 taught by Professor Lopez during the Summer '08 term at Valencia.
- Summer '08
- Managerial Accounting