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Unformatted text preview: ch12 Student: ___________________________________________________________________________ 1. The design and use of management control systems affects how an individual makes and implements decisions. True False 2. In general, there is a direct relationship between the quality of the information provided to managers and the quality of decisions made using that information. True False 3. Rational managers will always make decisions that are in the best interest of the organization employing them. True False 4. Decentralization is the delegation of the authority to make decisions in the organization's name to subordinates. True False 5. In general, organizations are more centralized in the early stages of their existence and more decentralized as they grow. True False 6. One advantage of decentralization is faster response time to changes in the organization's environment by local managers. True False 7. One advantage of centralization is better use of top management's time on strategic decisions. True False 8. Properly developed and implemented management control systems influence subordinates to act in the organization's best interest. True False 9. Delegated decision authority is the specification of what decisions a subordinate can make in the organization. True False 10. It is important to not consider an organization's compensation and reward system when designing its performance evaluation system. True False 11. Managers in a cost center are held responsible for both the costs and volumes of inputs used to produce a product or provide a service. True False 12. In general, profit centers are found at higher levels in an organization than investment centers. True False 13. Properly designed management control systems can totally eliminate the inherent conflict between individual behavior and organizational goals. True False 14. There is no single accounting measure that can fully measure the performance of a profit or investment center. True False 15. Fixed compensation is generally not linked to measured performance; i.e., it is independent of measured performance. True False 16. Properly designed management control systems have both fixed compensation and contingent compensation. True False 17. Cost allocations based on dual rates assume that a common cost can be separated into a fixed and variable component. True False 18. The primary reason to use a dual rate allocation system is to focus a manager's performance evaluation on factors under the manager's direct control. True False 19. It is possible for performance evaluation systems and/or management control systems to contribute to unethical or fraudulent behavior. True False 20. Properly designed management control systems will eliminate fraudulent behavior by maximizing goal congruence within the organization. True False 21. Which of the following statements is (are) true regarding managerial decisions?...
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