Question

1. Managers in a cost center are held responsible for both the costs and volumes of inputs used to produce a product or provide a service.

True

False

2. Properly designed management control systems have both fixed compensation and contingent compensation.

True

False

3. Properly designed management control systems will eliminate fraudulent behavior by maximizing goal congruence within the organization.

True

False

4. A master budget consists of a one-year plan linked to (a) organizational goals, (b) strategic long-range profit plan, and (c) a tactical short-range profit plan.

True

False

5. Participative budgeting streamlines the budgeting process by reducing budget development time.

True

False