Question

Activities that support the products or services a company provides are classified as a(n)

	a.	batch-level activity.
	b.	product-level activity.
	c.	organization-level activity.
	d.	unit-level activity.

Which of the following is a limitation of ROI as a performance measure?

	a.	ROI can increase without any change in operations by acquiring more capital assets.
	b.	ROI can increase without any change in operations because of depreciation.
	c.	It can encourage desirable behavior by managers.
	d.	It can encourage managers to increase sales revenue.

Answer 1

1) PRODUCT LEVEL ACTIVITY IS AN ACTIVITY THAT SUPPORTS THE PRODUCTION OF PRODUCT OR SERVICES WITHOUT CONSIDERING THE NO OF BATCHES RUN AND NUMBER OF ITEMS PRODUCES

HENCE ANSWER IS B

2) ROI IS NOT TOO FAVOURITE TO USE BY COMPANIES TO MEASURE PERFORMANCE OF DIVISIONAL MANAGERS BECAUSE IT HAS A BIG LIMITATION THAT ROI CAN BE SIMPLY INCREASED BY ACQUIRING INVESTMENTS GIVING HIGH RETURNS. HENCE, MANAGERS WILL INVEST IN MORE AND MORE ASSETS TO INCREASE ROI

HENCE ANSWER IS A

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