1. What are the four specific components of a control policy?

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 Control limits
 Feedback results
 Strictness of enforcement
 Reward structure
2. What is the difference between corporate service costs and corporate administrative
costs?
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Corporate service costs are the costs of services performed centrally for the benefit of both
corporate and the various responsibility centers. While corporate administrative costs are
those costs that are necessary to operate the corporate office.
1. what happens when iversion presents its assignment?
=She was convinced that she had perforned well and that seh had solved the problem that had
caused such animosity within the top management team

2. What the spesific components of a control policy that may affect human response?
=Limits set by management, the type of feedback result, the strictness of enforcement, and
the rewards and penalties attached to the control

3.How many feedback that we can achieve from the feedback result?
= Positive feedback will tell them that they are on the right track and will motivate thembto
repeat the same effort. Negative feedback will not automatically induce them to greater
effort, but it may eventually lower their aspiration levels and erode their efort and
performance levels.

4.What the potential of standard cost system?

=Is used either as aids in increasing motivation and goal congruence or as devices to achieve
high levels of autocratic and coercive control

5. what happens for individuals if the =standards are too tight?

Too tight standards and the possibility of failure result in frustation and discouragement.
Their performance will decline even further since they stop trying to improve.
6. If management decides not to investigate, they will faced with 2 possibilities. Mention the
2 possibilities..
=The variance may disappear without interference in the next operating period or it may
continue and the deviant condition will unremedied.

1. state weaknesses of traditional (historical) cost systems

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- the only basis for control is the comparison of current performance with that of the previous
period
- Such systems also provide little useful information for planning and managerial decision
making.
- The biggest drawback is that the system is dangerous because it encourages unwanted and
destructive responses when used in evaluating the performance of individuals assigned the
task of carrying out various activities within the budget constraints.

2. explain about the product mix decision

= Decisions regarding product mix, sales managers who know the contribution margins of
their products will be much better able to decide which products to encourage and which
should be reduced or tolerated simply because their sales benefit other products.