Chapter 24: Q24-4RQ (page 1355)
What is goal congruence?
Short Answer
Answer
Goal congruence is the stage where the various departments of anorganization share a common goal.
Chapter 24: Q24-4RQ (page 1355)
What is goal congruence?
Answer
Goal congruence is the stage where the various departments of anorganization share a common goal.
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One subunit of Harris Sports Company had the following financial results last month:
Harris—Subunit X Actual Results Flexible Budget Flexible Budget Variance (F or U) % Variance (F or U)
Direct Materials \( 28,000 \) 25,900
Direct Labor 13,000 13,800
Indirect Labor 26,400 23,100
Utilities 12,300 11,300
Depreciation 25,000 25,000
Repairs and Maintenance 4,600 5,600
Total \( 109,300 \) 104,700
Requirements
1. Complete the performance evaluation report for this subunit. Enter the variance percent as a percentage of the budgeted amount rounded to two decimal places.
2. Based on the data presented, what type of responsibility center is this subunit?
3. Which items should be investigated if part of management’s decision criteria is to investigate all variances exceeding $2,500 or 10%?
4. Should only unfavorable variances be investigated? Explain.
Refer to the information in Short Exercise S24-7. Compute each division’s RI. Interpret your results. Are your results consistent with each division’s ROI?
Explain the difference between a centralized company and a decentralized company.
What is the biggest disadvantage of using ROI to evaluate investment centers?
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