Which of the Following Is Not a Measure That Management

question 6

Multiple Choice

Which of the following is not a measure that management can use in evaluating and controlling investment center performance?

• A) rate of return on investment
• B) negotiated price
• C) residual income
• D) income from operations

---

Definitions:

Managers

Individuals responsible for planning, directing, and overseeing the operations and fiscal health of a portion of an organization or the entire organization.

Flexible Budgets

Budgets that adjust or flex according to changes in activity levels or other factors that influence operating expenses.

Unfavorable Variance

A situation where actual costs exceed budgeted or expected costs.

Efficiency Variance

The difference between the actual input used in production and the standard input that was expected to be used.