Quantitative questions on Management Control Systems University Question Paper May 2011: 1. A company is working at 50% of its capacity. It sells 20000 units at a price of Rs. 100 per unit. Cost per unit is Rs. 90, the breakup of which is as follows: Material Rs. 40 Manufacturing Cost Rs. 30 ( 30% is fixed) Selling Cost Rs. 10 ( 40% is fixed) Administration Cost Rs. 10 ( 50 % is fixed) When the company works @ 80% capacity, selling price will fall by 5% and material cost will rise
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Fernandez Zijian “Justus” Jia Case Questions Coke vs Pepsi 1) What is EVA? What are the advantages and disadvantages of using EVA as a measure of company performance? EVA stands for economic value added. EVA is a value based financial performance measure based on Net Operating Profit after Taxes, the invested capital required to generate that income, and the WACC. The primary advantage of EVA is that it provides a measure of wealth creation that aligns the goals of divisional
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= RM 5 030 563 Question 2 Rank the company in terms of their financial performance. The company may be ranked using several methods. The methods are such as based on net profit after tax, economic earnings, return on investment (ROI) or return
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Chapter 12 Performance Evaluation in Decentralized Organizations Solutions Review Questions 1. Firms decentralize because, as organizations grow, the number and types of decisions that need to be made increase substantially. A single individual will not have the relevant expertise and knowledge to make all of these decisions – thus, firms delegate decision-making responsibility. 2. The benefits include (1) timely decisions, (2) tailoring managerial skills and specializations to
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Portfolio Management Control SystemsHoofdstuk 11: Performance Measurement | | Naam :Docent : Klas : | HOOFDSTUK 11: PRESTATIEMETING Gebruikte informatie bij Control Managers: Zijn verantwoordelijk voor de effectiviteit en efficiency van het werk. Managers beheersen niet de kosten, maar beïnvloeden activiteiten van mensen die verantwoordelijk zijn voor de kosten. Managementactviteiten zijn gebaseerd op: 1) Informele informatie Observatie, face-to-face, vergaderingen
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Q.1 How is RI (EVA) analysis carried out? Explain advantages and disadvantages. Ans. The EVA method is based on the past performance of the corporate enterprise. The underlying economic principle in this method is to determine whether the firm is earning a higher rate of return on the entire invested funds than the cost of such funds (measured in terms of weighted average cost of capital, WACC). If the answer is positive, the firm’s management is adding to the shareholders value by earning extra
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integrated firms cope with these problems? Multi divisional firms might have developed better accounting systems, (e.g., using Church's ideas) but instead they coped with these obstacles using decentralization (p.94-96). In decentralized firms, top management plans strategy, while subordinate managers coordinate and control operating activities (p.97). 66. What was the New Use Developed For ROI? J&K indicate that ROI was used to delegate responsibility and allocate funds, i.e., capital (p.98). (Note:
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Tranfer Pricing and Agency Theory Performance management: It is composed by objectives, that are achieved through programs, that are supported by technologies. There are different to objectives to achieve in single departments and areas: 1. Cost reduction 2. Quality improvement 3. Capacity improvement Since there are a lot of objectives, we say that performance management is discursive. To manage the achievement of meeting these obj there are different programs: 1. Lean production (for cost
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Rowe Cos. and Merrill Lynch: The ROI Process in Business/IT Planning CASE 5: F-Secure, Microsoft, GM, and Verizon: The Business Challenge of Computer Viruses CASE – 1 GE, Dell, Intel, and Others: The competitive Advantage of Information Technology There’s nothing line a punchy headline t get an article some attention. A recent piece in the Harvard Business Review (May 2003), shockingly labeled “IT Doesn’t Matter,” has garnered the magazine more buzz than at any time since Jack Welch affair
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Objective: 1 Shortening delivery times is a major part of the quality improvement process. 2. ISO 9000 developed by the International Organization for Standardization is a set of five international standards for quality management adopted by more than 85 countries. Answer: True Difficulty: 2 Objective: 1 3. Quality of design measures how closely the characteristics of products or services meet the needs and wants of customers. Answer: True Difficulty: 2 Objective: 1 4. In the
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