A Performance Management and Evaluation System Is Utilized So That

question 108

Multiple Choice

A performance management and evaluation system is utilized so that a company can identify which of the following?

• A) How well it is doing and where it is going
• B) How satisfied investors are with their return on investment
• C) How satisfied both customers and employees are
• D) How well it is doing, where it is going, and what improvements will bring in more profit

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Definitions:

Relevant Range

The range of activity within which assumptions about variable and fixed cost behavior are valid.

Cost Behaviour

The way in which a cost changes or reacts in relation to changes in business activity levels.

Variable Selling Expenses

Sales-related costs that vary directly with the volume of sales, such as commissions and shipping charges.

Contribution Approach

An income statement format that organizes costs by their behavior. Costs are separated into variable and fixed categories rather than being separated according to organizational functions.