Efficiency and Effectiveness Should First Be Examined Before Concluding That

question 20

Multiple Choice

Efficiency and effectiveness should first be examined before concluding that the problem is:

• A) not enough staff.
• B) need for more resources.
• C) a poor program design.
• D) incompetent management.

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Definitions:

Residual Income

The net operating income that an investment center earns above the minimum required return on its operating assets.

Investment Center

A business segment whose manager has control over cost, revenue, and investments in operating assets.

Cost Center

A business segment whose manager has control over cost but has no control over revenue or investments in operating assets.

Profit Center

A business segment whose manager has control over cost and revenue but has no control over investments in operating assets.