"Levers of Control," in Addition to a Diagnostic Control System

question 18

Multiple Choice

"Levers of control," in addition to a diagnostic control system, are needed in an organization because ________.

• A) diagnostic controls have been found to lead to poor financial performance
• B) diagnostic controls have no place in a balanced scorecard system
• C) pressure to perform on diagnostic controls may lead to unethical behavior
• D) they are mandated by the Financial Accounting Standards Board

Comprehend the use of job-order costing systems in manufacturing settings.

Interpret and calculate the impact of underapplied or overapplied manufacturing overhead on COGS.

Analyze and calculate raw materials usage based on inventory data.

Understand and calculate the allocation of underapplied or overapplied manufacturing overhead.

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Definitions:

Retained Earnings

Funds that are not distributed as dividends but are reserved by the company to reinvest in its business, pay off debt, or save for future use.

Deficit

The amount by which expenses exceed income or liabilities exceed assets.

Dividend Yield Ratio

An indicator of the yearly dividends paid by a corporation as a proportion of its stock price.