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11DQ 12DQ 13DQ 14DQ 15DQ Why are cost centers considered to be more appropriate than profit centers for production departments?Explain how a production quota used to evaluate a supervisor can adversely affect quality control, material usage efficiency, and labor relations.18DQ 19DQ 20DQ 21DQ 22DQ Which of the following statements best describes a profit center? a. The responsibility for combining the raw materials, direct labor, and other factors of production into a final product b. The authority to make decisions affecting the major determinants of profit, including the power to choose its markets and sources of supply c. The authority to make decisions affecting the major determinants of profit, including the power to choose its markets, sources of supply, and significant control over the amount of invested capital d. The authority to make decisions over the most significant costs of operations, including the power to choose the sources of supply e. The authority to provide specialized support to other units within the organization 2MCQ Which of the following is NOT an output report of the financial reporting system? a. Tax return b. Variance analysis report c. Statement of cash flows d. Comparative balance sheet 4MCQ 5MCQ 6MCQ Hercules Inc. uses a performance reporting system that shows data for each subordinate employee who reports to a supervisor, the actual costs incurred during the period, the budgeted costs, and all variances from budget for that subordinate's department. The name of this reporting system is a. contribution accounting. b. program budgeting. c. flexible budgeting. d. cost-benefit accounting. e. responsibility accounting.8MCQ Which of the following statements is true? a. Journal vouchers summarizing transaction activity flow from various operational departments into the GLS, where they are independently reconciled and posted to the general ledger accounts. b. Journal vouchers summarizing transaction activity flow from the accounting department into the GLS, where they are independently reconciled and posted to the general ledger accounts. c. Journal vouchers detailing transaction activity flow from various operational departments into the GLS, where they are independently reconciled and posted to the journal voucher history file. d. Journal vouchers summarizing transaction activity flow from operational departments into the GLS are independently reconciled and are posted to the journal voucher history file.Which of the following budgeting processes is LEAST likely to motivate managers toward organizational goals? a. Setting budget targets at attainable levels b. Participation by subordinates in the budgetary process c. Use of management by exception d. Holding subordinates accountable for the items they control e. Having top management set budget levels 11MCQ At what level of management is the long-range planning function most important? a. For staff functions b. At top-management levels c. At middle-management levels d. At lower-management levels e. For line functions Which is the fundamental purpose of responsibility accounting? a. Variance analysis b. Pricing c. Budgeting d. Motivation e. Authority 14MCQ An investment center is described best by which of the following statements? a. The authority to make decisions affecting the major determinants of profit, including the power to choose its markets and sources of supply b. The authority to make decisions affecting the major determinants of profit, including the power to choose its markets and sources of supply, and significant control over the amount of invested capital c. The authority to make decisions over the most significant costs of operations, including the power to choose the sources of supply d. The authority to provide specialized support to other units within the organization e. The responsibility for developing markets for and selling of the output of the organization 1P FINANCIAL REPORTING PROCESS The following contains the various steps of the financial reporting process. Place these steps in the proper order and indicate whether each step is a function of the TPS, GLS, or FRS. Record transaction in special journal. Make adjusting entries. Capture the transaction. Prepare the postclosing trial balance. Prepare the adjusted trial balance. Prepare the financial statements. Journalize and post the adjusting entries. Post to the subsidiary ledger. Post to the general ledger. Journalize and post the dosing entries. Prepare the unadjusted trial balance.3P 4P 5P 6P 7P ORGANIZATIONAL CHART Prepare an organizational chart for your university. (Your campus phone directory catalog may be helpful.)DECISION LEVEL Classify the following decisions as being characteristic of strategic planning, tactical planning, managerial control, or operational control. Determining the mix of products to manufacture this year Examining whether the number of defective goods manufactured is within a certain range Expanding a product line overseas Determining the best distribution route Examining whether the cost of raw materials is within a certain range Examining whether personnel development cost is rising Employing more automated manufacturing this year Examining whether the amount of scrap material is acceptable Building a new plant facility Examining whether employees attitudes are improving Examining whether production levels are within a predicted range Making purchasing arrangements with a new supplier Increasing production capabilities this year by purchasing a more efficient piece of machinery Closing a plant 10P ORGANIZATION STRUCTURE AND SPAN OF CONTROL Refer to the organization charts labeled Structure A and Structure B in the figure for problem 11. Required a. For organizational structure A, describe the 1. advantages and disadvantages of this structure. 2. impact of the resulting span of control. 3. possible effect on employee behavior. b. For organizational structure B, describe the 1. advantages and disadvantages of this structure. 2. impact of the resulting span of control. 3. effect on employee behavior. c. When determining the appropriate span of control, discuss the factors that should be considered.ORGANIZATION STRUCTURE AND SPAN OF CONTROL Refer to the organization charts labeled Structure A and Structure B in the figure for problem 12. Required a. For the organizational structure A, describe the 1. advantages and disadvantages of this structure. 2. impact of the resulting span of control. 3. effect of the organizational structure on employee behavior. b. For the flat organizational structure B, describe the 1. advantages and disadvantages of that organizational structure. 2. impact of the resulting span of control. 3. effect of the organizational structure on employee behavior. c. When determining the appropriate span of control for a company, discuss the factors that should be considered.CMA-ADAPTED ORGANIZATIONAL STRUCTURE While attending night school to earn a degree in computer engineering, Stan Wilson worked for Morlot Container Company (MCC) as an assembly line supervisor. MCC was located near Wilsons hometown and had been a prominent employer in the area for many years. MCCs main product was milk cartons that were distributed throughout the Midwest for milk-processing plants. The technology at MCC was stable, and the assembly lines were monitored closely. MCC employed a standard cost system because cost control was considered important. The employees who manned the assembly lines were generally unskilled workers who had been with the company for many years; the majority of these workers belonged to the local union. Wilson was glad he was nearly finished with school because he found the work at MCC to be repetitive and boring, even as a supervisor. The supervisors were monitored almost as closely as the line workers, and standard policies and procedures existed that applied to most situations. Most of MCCs management had been with the company for several years and believed in clear lines of authority and well-defined responsibilities. Whereas he knew he had performed well against the companys standards, Wilson also knew that there probably would be little opportunity for advancement or significant compensation increases. After receiving his degree, Wilson went to work in the research and development department of Alden Computers, a five-year-old company specializing in educational computer systems for elementary schools. The company was customer-oriented and willing to tailor its computer systems to the needs of the end users. The customization of its systems, combined with continual changes in technology, resulted in a job shop orientation in the companys production facility. The employees who assembled Aldens systems were skilled technicians who worked closely with the engineering staff. Wilson was gratified by the respect and authority his newly acquired knowledge and skills afforded him at Alden. If changes were required in his area of expertise, Wilson often made recommendations about how the work should proceed and was involved in decisions on new product development. The companys management team frequently rolled up its sleeves and worked alongside the technicians when production problems arose; the lines of authority were sometimes difficult to distinguish, and decisions were often made by the expert on the spot. Wilson believed that his skills were appreciated at Alden and he would be fairly compensated for his professional expertise. Required a. MCC and Alden Computers represent two different types of organizational structures. In terms of each of the following points, explain how MCC differs from Alden Computers. 1. General organizational structure and climate 2. Bases of authority 3. Evaluation criteria 4. Bases of compensation b. Both structures have potential benefits or can create problems. Discuss the features of the structure used by 1. Alden Computers that might benefit MCC. 2. Alden that might create problems for Alden. 3. MCC that might benefit Alden Computers.CMA-ADAPTED PERFORMANCE MEASURES The Star Paper Division of Royal Industries is located near Los Angeles. A major expansion of the divisions only plant was completed in April 2015. The expansion consisted of an addition to the existing building, additions to the production line machinery, and the replacement of obsolete and fully depreciated equipment that was no longer efficient or cost-effective. On May 1, 2015, George Harris became manager of Star. Harris had a meeting with Marie Fortner, vice president of operations for Royal, who explained to Harris that the company measured the performance of divisions and division managers on the basis of return on gross assets (ROA). When Harris asked if other measures were used in conjunction with ROA, Fortner replied, Royals top management prefers to use a single performance measure. Star should do well this year now that it has expanded and replaced all of that old equipment. You should have no problem exceeding the divisions historical rate. Ill check with you at the end of each quarter to see how you are doing. Fortner called Harris after the first quarter results were completed because Stars ROA was considerably below the historical rate for the division. Harris told Fortner that he did not believe that ROA was a valid performance measure for Star. Fortner indicated that she would discuss this with others at headquarters and get back to Harris. However, there was no further discussion of the use of ROA but only reports on divisional performance at the end of the second and third quarters. Now that the fiscal year has ended, Harris has received the memorandum in the figure designated for Problem 14. PROBLEM 14: PERFORMANCE MEASURES TO: George Harris, Star Paper Division FROM: Marie Fortner, Royal Industries SUBJECT: Divisional Performance The operating results for the fourth quarter and for our fiscal year ended on April 30 are now complete. Your fourth quarter return on gross assets was only 9 percent, resulting in a return for the year of slightly under 11 percent. I recall discussing your low return after the first quarter and reminding you after the second and third quarters that this level of return is not considered adequate for the Star Paper Division. The return on gross assets at Star has ranged from 15 to 18 percent for the past five years. An 11 percent return may be acceptable at some of Royals other divisions, but not at a proven winner like Star, especially in light of your recently improved facility. Please arrange to meet with me in the near future to discuss ways to restore Stars return on gross assets to its former level. Harris is looking forward to meeting with Fortner as he plans to pursue the discussion about the appropriateness of ROA as a performance measure for Star. While the ROA for Star is below historical levels, the divisions profits for the year are higher than at any previous time. Harris is going to recommend that ROA be replaced with multiple criteria for evaluating performancenamely, dollar profit, receivable turnover, and inventory turnover. Required a. Identify general criteria that should be used in selecting performance measures to evaluate operating managers. b. Describe the probable cause of the decline in the Star Paper Divisions return on gross assets during the fiscal year ended April 30, 2007. c. On the basis of the relationship between Fortner and Harris, as well as the memorandum from Fortner, discuss apparent weaknesses in the performance evaluation process at Royal Industries. d. Discuss whether the multiple performance evaluation criteria that Harris suggested would be appropriate for the evaluation of the Star Paper Division.15P MANAGEMENT BY EXCEPTION A variety of quantitative measures are used to evaluate employee performance, including standard costs, financial ratios, human resource forecasts, and operating budgets. Required a. Discuss the following aspects of a standard cost system. 1. Discuss the characteristics that should be present to encourage positive employee motivation. 2. Discuss how the system should be implemented to positively motivate employees. b. The use of variance analysis often results in management by exception. 1. Explain the meaning of management by exception. 2. Discuss the behavioral implications of management by exception. c. Explain how employee behavior could be adversely affected when actual-to-budget comparisons are used as the basis for performance evaluation.17P 1RQ 2RQ 3RQ 4RQ 5RQ 6RQ 7RQ 8RQ 9RQ 10RQ 11RQ 12RQ 13RQ 14RQ 15RQ 16RQ 17RQ What are the conditions for third normal form (3NF)?19RQ 20RQ 21RQ What is a user view?23RQ 24RQ 25RQ 1DQ 2DQ 3DQ 4DQ 5DQ 6DQ 7DQ 8DQ 9DQ 10DQ 11DQ 12DQ 13DQ 14DQ 15DQ Discuss the accounting implications of the update, insertion, and deletion anomalies associated with improperly normalized tables.17DQ 18DQ 19DQ 20DQ 1MCQ 2MCQ 3MCQ 4MCQ 5MCQ 6MCQ 7MCQ 8MCQ 9MCQ 10MCQ 11MCQ 12MCQ 13MCQ 14MCQ 15MCQ 16MCQ 17MCQ 18MCQ The Mega Supply Corporation has three divisions: Commercial Products, Consumer Products, and Corporate Offices, which are located in Hatfield, South Carolina; Palo Alto, California; and Tulsa, Oklahoma, respectively. The Commercial Products division deals exclusively in sales of industrial products and supplies to business organizations. The Consumer Products division sells nonindustrial products to private consumers. Both divisions have dedicated inventory warehouses at their respective locations in Hatfield and Palo Alto. Because of the dissimilar nature of the commercial and consumer division product lines, they do not share customers or vendors. Currently Mega Supply uses a centralized database, which is located at their Corporate Division in Tulsa. Some relevant database tables and attributes are presented in the figure designated Problem 1. When customers contact their respective sales division, the sales clerk logs into the corporate database, checks credit, determines product availability, and creates a sales invoice. The corporate office typically bills the customer within 3 or 4 days and extends terms of net 30. Inventory control, AR processing, cash receipts, purchases from vendors and AP processing, and cash disbursements are performed by the corporate office. Due to Megas rapid growth, the company has seen a significant increase in sales and purchase transactions, which has resulted in excessive delays in processing transactions from the central database. Since customer service, including rapid response to customer inquiries and sales order processing, is a cornerstone of Megas business model, these delays are unacceptable. Required Mega wants to improve response time by distributing some parts of the corporate database while keeping other parts of it centralized. (A) Develop a schema for distributing Mega Supply Corporations database. Add new tables and attributes as needed but limit the schema to the tables needed to support sales, cash receipts, purchases/AP, and cash disbursements. In your schema, indicate whether tables are centralized, replicated, or partitioned. (B) Explain how the new system will operate.2P Lesters Rentals is located in Cincinnati, Ohio. The company rents party equipment such as tents, tables, chairs, linens, and china for small occasions and large weddings. They also rent a variety of home improvement tools and contractor equipment including generators, grinders, power hammers, and drills. The company serves approximately 5,000 repeat customers and has more than 1,200 different inventory items for rent in stock. Lesters purchases replacement stock from 45 different vendors. Each vendor supplies different items, but Lestors may purchase the same item from different vendors. Other business rules include (1) each inventory type has multiple quantities on hand (2) customers use their telephone numbers to uniquely identify themselves for rentals; (3) customers may rent more than one item of the same type. Required Create a normalized data model for Lesters Rentals. Include the primary keys, data attributes, and foreign keys.4P 5P 6P 7P 8P 9P 10P 11P 12P Prepare the 3NF base tables needed to produce the sales report view shown in the diagram for Problem 13.14P 15P 16P 17P 18P 21P 22P 23P 24P What is a user view?2RQ 3RQ What are economic resources?What are economic events?6RQ 7RQ 8RQ 9RQ 10RQ 11RQ 12RQ 13RQ 14RQ 15RQ 16RQ 17RQ 18RQ 19RQ 20RQ 1DQ Explain the relationship between cardinality and association.3DQ 4DQ 5DQ 6DQ Distinguish between economic events and support events, and provide examples of each.8DQ Why are traditional accounting events, such as recording a transaction in a journal and posting ledgers, not modeled in REA diagrams?10DQ 11DQ 12DQ 1MCQ Which of the following is not a characteristic of economic agents? a. At least two economic agents participate in each economic events. b. They participate in economic events and in support events. Internal agents are employees of the company whose system is being modeled. c. External agents are not employees of the company whose system is being modeled. d. All of the above describe agents.3MCQ Which of the following associations would most likely describe the relationship between an internal agent and an economic event? a. I:M b. 1:1 c. M:M d. 0:M e. None of the above 5MCQ 6MCQ 7MCQ 8MCQ 9MCQ 10MCQ 1P Bentley Restorations Company restores and sells top-end classic and antique automobiles. Most of its customers are private collectors, but some are investors who buy multiple cars and hold them for resale. Bentley extends no credit terms. All sales are for cash. Required Which of the relationships in the diagram for Problem 2 properly models the entity associations for Bentley Restorations? Explain your answer.3P 4P Prepare an REA model depicting the issuance of raw materials into the manufacturing process. Identify the resource, event, and agent entities. Show the cardinalities in the associations between entities.Cryogenics Inc., is a leading developer, designer, and manufacturer of tanks, moveable containers, and trailers for the most efficient storage and distribution of liquid helium and hydrogen. Cryogenics started as a private company when founded in 1960 by industrialist William Hodges. It has since gone public and has grown to support a staff 250 employees between its Tulsa, Oklahoma, and Prague, Czech Republic, operations to meet the global demand for liquid helium and hydrogen storage with the highest performance ratings in the industry. The following describes Cryogenics fixed asset system. Asset acquisition begins when the department manager recognizes the need to obtain or replace an existing fixed asset. The manager prepares two copies of a purchase requisition; one is filed in the department, and one is sent to the purchasing department. The purchasing department uses the purchase requisition to prepare three copies of a purchase order. One copy of the purchase order is sent to the supplier, another copy is sent to the AP department, and the third copy is filed in the purchasing department. Vendors ship the ordered items to Cryogenics receiving department along with the packing slip. The receiving clerk then prepares three copies of a receiving report. One copy of the receiving report is sent to AP, one is sent to the department manager, and one is sent to the inventory department clerk who uses it to update the inventory records. A few days later the vendor sends an invoice to the AP clerk, which the clerk reconciles with the purchase order and receiving report. The AP clerk inputs the information into the computer terminal, posts the liability, updates the purchase journal, and prints out hard copies of a journal voucher and cash disbursement voucher. The journal voucher is sent to the general ledger department, and the cash disbursement voucher and the suppliers invoice are sent to the cash disbursements department. The purchase order and the receiving report are filed in the AP department. Using the information from the suppliers invoice and the cash disbursement voucher, the cash disbursements clerk prepares a hard copy check in payment of the liability, sends the check to the vendor, and posts it to the check register. Finally, the clerk sends the cash disbursement voucher to the general ledger department. Periodically, the department manager adjusts the fixed asset inventory subsidiary account balances to reflect asset depreciation and sends an asset status summary to the general ledger. The general ledger department clerk reconciles the cash disbursements voucher, the journal voucher, and the asset status summary, and posts to the general ledger accounts. Required a. Prepare the REA model to support the fixed asset procedures. b. Show the cardinalities for all associations. c. List the tables, keys, and attributes needed to implement this model in a relational database.7P 8P 9P 10P Define ERP.2RQ Define core applications, and give some examples.4RQ 5RQ 6RQ 7RQ 8RQ 9RQ 10RQ 11RQ 12RQ 13RQ 14RQ 15RQ 16RQ 17RQ 18RQ 19RQ 20RQ 21RQ 22RQ 23RQ How are OLTP and OLAP different? Provide some examples to explain.2DQ Why do ERP systems need bolt-on software? Give an example of bolt-on software.Your organization is considering acquiring bolt-on software for your ERP system. What approaches are open to you?5DQ 6DQ 7DQ 8DQ 9DQ 10DQ 11DQ ERP systems use the best-practices approach in designing their applications, yet goodness of fit is considered to be an important issue when selecting an ERP. Shouldnt the client just be able to use whatever applications the ERP system provides?13DQ Explain how SAP uses roles as a way to improve internal control.15DQ 16DQ Distinguish between the OLAP operations of consolidation and drill-down.When would slicing and dicing be an appropriate OLAP tool? Give an example.19DQ What is the fundamental concept behind the rule of least access? Explain why this is a potential problem in an ERP environment.What is the purpose of role-based governance software?1MCQ 2MCQ 3MCQ 4MCQ 5MCQ 6MCQ Which statement is LEAST accurate? a. Implementing an ERP system has more to do with changing the way an organization does business than it does with technology. b. The phased-in approach to ERP implementation is particularly suited to diversified organizations whose units do not share common processes and data. c. Because the primary reason for implementing an ERP is to standardize and integrate operations, diversified organizations whose units do not share common processes and data do not benefit and tend not to implement ERPs. d. To take full advantage of the ERP process, reengineering will need to occur. e. A common reason for ERP failure is that the ERP does not support one or more important business processes of the organization.8MCQ Auditors of ERP systems a. need not be concerned about segregation of duties because these systems possess strong computer controls. b. focus on output controls such as independent verification to reconcile batch totals. c. are concerned that managers fail to exercise adequate care in assigning permissions. d. do not see the data warehouse as an audit or control issue at all because financial records are not stored there. e. need not review access levels granted to users because these are determined when the system is configured and never change.10MCQ 1P Your organization is planning to implement an ERP system. Some managers in the organization favor the big bang approach. Others are advocating a phased-in approach. The CEO has asked you, as project leader, to write a memo summarizing the advantages and disadvantages of each approach and to make a recommendation. This is a traditional organization with a strong internal hierarchy. The company was acquired in a merger two years ago, and the ERP project is an effort on the part of the parent company to standardize business processes and reporting across the organization. Prior to this, the organization had been using a general ledger package that it acquired in 1979. Most of the transaction processing is a combination of manual and batch processing. Most employees think that the legacy system works well. At this point, the implementation project is behind schedule.3P 4P 5P 6P 7P 8P 9P 1RQ 2RQ 3RQ 4RQ 5RQ 6RQ 7RQ 8RQ 9RQ 10RQ 11RQ 12RQ 13RQ 14RQ 15RQ 16RQ 17RQ 18RQ 19RQ 20RQ 21RQ 22RQ 23RQ 1DQ 2DQ 3DQ 4DQ 5DQ 6DQ 7DQ 8DQ 9DQ 10DQ 11DQ What is a digital envelope?13DQ 14DQ 15DQ 16DQ 17DQ 18DQ 19DQ 1MCQ 2MCQ 3MCQ 4MCQ 5MCQ 6MCQ 7MCQ A system of computers that connects the internal users of an organization distributed over a wide geographic area is a(n) a. LAN. b. Internet. c. decentralized network. d. Intranet. e. multidrop network.9MCQ 10MCQ 1P 4P 5P 6P

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