ACC 307 CH 13
A high level of precision between resources used and output produced exists with: A) engineered costs B) discretionary costs C) both engineered and discretionary costs D) neither engineered nor discretionary costs
A
Managers can reduce capacity-based fixed costs by measuring and managing ________. A) unused capacity B) variable costs C) engineered costs D) discretionary costs
A
Manufacturing cycle efficiency is an example of a balanced-scorecard measure of the: A) internal business process perspective B) customer perspective C) learning and growth perspective D) financial perspective
A
Measures of the balanced scorecard's customer perspective include: A) market share B) number of on-time deliveries C) number of process improvements D) revenue growth
A
Measures of the balanced scorecard's learning-and-growth perspective include: A) employee satisfaction ratings B) economic value added C) time taken to deliver product to customers D) customer-retention percentage
A
Successful implementation of a product differentiation strategy will result in: A) a large favorable growth and price-recovery components B) a large favorable price-recovery and productivity components C) a large favorable productivity and growth components D) only a large favorable growth component
A
The first step to successful balanced scorecard implementation is clarifying the: A) organization's vision and strategy B) elements that pertain to value-added aspects of the business C) owner's expectations about return on investment D) objectives of all four balanced scorecard measurement perspectives
A
The revenue effect of price recovery is calculated by multiplying the difference in selling price (current year minus the previous year) by ________. A) actual units sold in the current year B) budgeted units sold in the previous year C) budgeted units sold in the current year D) actual units sold in the previous year
A
When analyzing the change in operating income, the strategy component of productivity will increase when: A) capacity is reduced B) quality is enhanced C) selling prices are increased D) more units are produced and sold
A
Which component of strategy measures the changes in operating income attributed solely to an increase in the quantity of output between Year 1 and Year 2? A) the growth component B) the price-recovery component C) the productivity component D) the cost leadership component
A
________ describes how an organization matches its own capabilities with the opportunities in the marketplace to accomplish its overall objectives. A) Strategy B) Planning C) Learning and growth perspective D) Customer perspective
A
A high level of uncertainty is represented in: A) engineered costs B) discretionary costs C) both engineered and discretionary costs D) neither engineered nor discretionary costs
B
All of the following relate to the balanced scorecard's learning and growth perspective EXCEPT: A) How do we achieve greater employee satisfaction? B) What new products do we create? C) How do we provide information systems with updated technology? D) How will we motivate and empower our employees?
B
An organization that is using the product differentiation approach would: A) focus on tight cost control B) carefully cultivate their brands C) provide products that are similar to competitors D) offer products at a lower cost than competitors
B
Balanced scorecard objectives are in balance when: A) debits equal credits B) financial performance measurements are less than the majority of measurements C) the measurements are fair D) the measurements reflect an improvement over the previous year
B
Conversion costs are an example of ________. A) direct engineered costs B) indirect engineered costs C) discretionary costs D) unused capacity costs
B
Discretionary costs: A) result from a cause-and-effect relationship between the output and the input B) include advertising and executive training costs C) can be variable or fixed in the short run D) pertain to processes that are detailed
B
Identify the best description of the balanced scorecard's financial perspective. To achieve our firm's vision and strategy: A) how can we obtain greater profits for the current year? B) how can we increase shareholder value? C) how will we obtain continuous improvements? D) how can we secure greater customer satisfaction?
B
Measures of the balanced scorecard's financial perspective include all of the following EXCEPT: A) operating income B) customer satisfaction C) gross profit percentage D) cost reductions
B
Measures of the balanced scorecard's internal-business-process perspective include: A) market share B) new product development time C) employee education D) return on investment
B
Rightsizing is another term for: A) growth management B) downsizing C) price recovery analysis D) cost recovery analysis
B
The balanced scorecard measures an organization's performance from all of the following perspectives EXCEPT: A) financial B) government C) customer D) learning and growth
B
The internal business processes perspective of the balanced scorecard comprises three subprocesses that address all of the following EXCEPT: A) innovative processes used to create new products, services, and processes B) motivating current employees C) providing service and support to the customer after the sale D) delivering existing products and services to best meet the needs of customers
B
The number of complaints about a product is an example of a balanced-scorecard measure of the: A) internal business process perspective B) customer perspective C) learning and growth perspective D) financial perspective
B
The revenue effect of growth is calculated by multiplying the difference in units sold (current year minus the previous year) by ________. A) selling price in the current year B) selling price in the previous year C) gross profit in the previous year D) gross profit in the current year
B
Unused capacity is difficult to determine for: A) engineered costs B) discretionary costs C) both engineered and discretionary costs D) neither engineered nor discretionary costs
B
When analyzing the change in operating income, the strategy component of price-recovery: A) calculations are similar to the efficiency-variance calculations B) compares the change in output price with the changes in input prices C) will report a large positive amount when a company has successfully pursued the cost leadership strategy D) isolates the change attributed solely to an increase in production efficiencies
B
Which component of strategy measures the change in operating income attributable solely to changes in a company's profit margins between Year 1 and Year 2? A) the growth component B) the price-recovery component C) the productivity component D) the cost leadership component
B
Which of the following is a force that shapes an organization's profit potential? A) Investors B) Potential entrants into the market C) Creditors D) Research and development
B
Yield variances: A) reveal the effect of substitution within a single factor of production B) address the productivity of a single component of one factor of production C) capture both substitutions between factors of production as well as within factors of production D) reveal the effect of substitution within multiple factors of production
B
________ is an organization's ability to offer products or services that are perceived by its customers as being superior and unique relative to those of its competitors. A) Strategy B) Product differentiation C) Cost leadership D) The balanced scorecard
B
An organization that is using the cost leadership approach would: A) incur costs for innovative R&D B) provide products at a higher cost than competitors C) focus on productivity through efficiency improvements D) bring products to market rapidly
C
Engineered costs: A) possess a high of level uncertainty B) are nonrepetitive C) are from physically observable activities D) have processes that are sketchy or unavailable
C
In general, profit potential ________ with greater competition, stronger potential entrants, products that are similar, and more-demanding customers and suppliers. A) increases B) stays constant C) decreases D) increases exponentially
C
Measures of the balanced scorecard's financial perspective include: A) information system availability B) number of new patents C) revenue growth D) defect rates
C
Measures of the balanced scorecard's internal-business-process perspective include all of the following EXCEPT: A) operating capabilities B) number of new products C) employee turnover rates D) defect rates
C
Successful implementation of a cost leadership strategy will result in: A) large favorable growth and price-recovery components B) large favorable price-recovery and productivity components C) large favorable productivity and growth components D) only a large favorable growth component
C
Surveys of employee satisfaction is an example of a balanced-scorecard measure of the: A) internal business process perspective B) customer perspective C) learning and growth perspective D) financial perspective
C
The lower the inputs for a given set of outputs or the higher the outputs for a given set of inputs, the higher the level of: A) standard costs B) sales C) productivity D) labor costs
C
What actions can management take when unused capacity is identified? A) eliminate the unused capacity B) attempt to grow to utilize the unused capacity C) Both A and B are correct. D) Neither A nor B are correct.
C
When analyzing the change in operating income, the strategy component of price-recovery will increase when: A) capacity is reduced B) production efficiencies are successfully implemented C) selling prices are increased D) more units are sold
C
When analyzing the change in operating income, the strategy component of productivity: A) calculations are similar to the sales-volume variance calculations B) compares the change in output price with the changes in input prices C) will report a large positive amount when a company has successfully pursued the cost leadership strategy D) isolates the change attributed solely to an increase in the quantity of units sold
C
Which component of strategy measures the reduction in costs attributable to a reduction in the quantity of inputs used in Year 2 relative to the quantity of inputs that would have been used in Year 1 to produce the Year 2 output? A) the growth component B) the price-recovery component C) the productivity component D) the cost leadership component
C
Which of the following is NOT true of a good balanced scorecard? A) It tells the story of a company's strategy by articulating a sequence of cause-and-effect relationships. B) It helps to communicate corporate strategy to all members of the organization. C) It identifies all measures, whether significant or small, that help to implement strategy. D) It uses nonfinancial measures to serve as leading indicators of future financial performance.
C
Which of the following is NOT true of the balanced scorecard? A) Different strategies call for different scorecards. B) Successful implementation requires commitment and leadership from top management. C) Only objective measures should be used and subjective measures should be avoided. D) Cause-and-effect linkages may not be precise and should evolve over time.
C
________ is an organization's ability to achieve low costs relative to competitors through productivity and efficiency improvements, elimination of waste, and tight cost control. A) Strategy B) Product differentiation C) Cost leadership D) The balanced scorecard
C
Discretionary costs: A) have detailed processes B) are physically observable activities C) possess a high level of certainty D) are usually large total amounts
D
Downsizing: A) may include eliminating jobs B) should be done within the context of a company's overall strategy C) is most difficult with discretionary costs D) All of these answers are correct.
D
Engineered costs: A) arise from periodic (usually annual) decisions B) often incur a delay between when the resource is acquired and when it is used C) include R&D and human resource costs D) include a high level of certainty
D
Identify the best description of the balanced scorecard's internal business processes perspective. To achieve our firm's vision and strategy: A) how do we lower costs? B) how do we motivate employees? C) how can we obtain greater profits? D) what processes will increase value to customers?
D
Measures of the balanced scorecard's customer perspective include all of the following EXCEPT: A) market share B) customer satisfaction C) number of new customers D) customer training on new products
D
Measures of the balanced scorecard's learning-and-growth perspective include all of the following EXCEPT: A) employee education and skill level B) percentage of processes with advanced controls C) employee-satisfaction ratings D) time taken to replace defective products
D
Successful reengineering involves: A) cutting across functional lines to focus on the entire business process B) redefining the roles and responsibilities of employees C) using information technology D) All of these answers are correct.
D
The balanced scorecard is said to be "balanced" because it measures: A) short-term and long-term objectives B) financial and nonfinancial objectives C) internal and external objectives D) All of these answers are correct.
D
The purpose of the balanced scorecard is best described as helping an organization: A) develop customer relations B) mobilize employee skills for continuous improvements in processing capabilities, quality, and response times C) introduce innovative products and services desired by target customers D) translate an organization's mission and strategy into a set of performance measures that help to implement the strategy
D
The return-on-investment ratio is an example of a balanced-scorecard measure of the: A) internal business process perspective B) customer perspective C) learning and growth perspective D) financial perspective
D
To effectively deal with unused capacity a company: A) may downsize B) may retain some unused capacity for future growth C) should consider it a waste of resources and eliminate all unused capacity D) Both A and B are correct.
D
When analyzing the change in operating income, the strategy component of growth will increase when: A) capacity is reduced B) production efficiencies are successfully implemented C) selling prices are increased D) more units are sold
D
When analyzing the change in operating income, the strategy component of growth: A) calculations are similar to the selling-price variance calculations B) isolates the change attributed solely to an increase in market share C) isolates the change attributed solely to an increase in industry growth D) isolates the change attributed solely to an increase in the quantity of units sold
D
Which of the following is NOT a force that shapes an organization's profit potential? A) Competitors B) Equivalent products C) Bargaining power of input suppliers D) All of these answers are correct.
D
________ is the fundamental rethinking and redesign of business processes to achieve improvements in critical measures of performance such as cost, quality, service, speed, and customer satisfaction. A) Strategy B) Customer perspective C) Learning and growth perspective D) Reengineering
D
________ translates an organization's mission and strategy into a comprehensive set of performance measures that provide the framework for implementing its strategy. A) Productivity component B) Product differentiation C) Cost leadership D) The balanced scorecard
D
An increase of operating income from one year to the next indicates a company's strategy was successful. T/F
F
Companies that have been successful at cost leadership will show large favorable price-recovery and growth components when analyzing profitability. T/F
F
Downsizing discretionary costs is easier than downsizing engineered costs. T/F
F
Employee satisfaction is a measure of the internal business perspective of the balanced scorecard. T/F
F
Engineered costs contain a higher level of uncertainty than discretionary costs. T/F
F
Engineered costs have no measurable cause-and-effect relationship between output and resources used. T/F
F
In for-profit companies, the primary goal of the balanced scorecard is to sustain short-run financial performance. T/F
F
In general, profit potential increases with greater competition, stronger potential entrants, products that are similar, and tougher customers and suppliers. T/F
F
It is relatively easy to identify unused capacity for discretionary costs. T/F
F
Product differentiation is an organization''s ability to achieve lower costs relative to competitors through productivity and efficiency improvements, elimination of waste, and tight cost control. T/F
F
Reengineering benefits are most significant when they focus on one business function rather than crossing functional lines of the business process. T/F
F
The customer perspective of the balanced scorecard evaluates the profitability of the strategy. T/F
F
The customer perspective under the balanced scorecard approach would include measures on cost reduction. T/F
F
The financial perspective of the balanced scorecard identifies targeted customers and market segments and measures the company's success in these segments. T/F
F
The growth component of a change in operating income measures the effect of price changes on revenues and costs. T/F
F
The price-recovery component measures the increase in operating income from selling more units of a product. T/F
F
The price-recovery component of a change in operating income from one year to the next measures the increase in operating income from selling more units of the product. T/F
F
The product differentiation strategy is probably best for a company if the engineering staff is more skilled at making process improvements than at creatively designing new products. T/F
F
The productivity component of operating income focuses exclusively on revenues. T/F
F
When implementing a balanced scorecard, the cause-and-effect linkages are always precise. T/F
F
A strategy map is a diagram that describes how an organization creates value by connecting strategic objectives in explicit cause-and-effect relationships with each other in the financial, customer, internal business process, and learning and growth perspectives. T/F
T
Different strategies call for different scorecards. T/F
T
Discretionary costs arise from periodic (usually yearly) decisions regarding the maximum amount to be incurred. T/F
T
Downsizing is an integrated approach of configuring processes, products, and people to match costs to the activities that need to be performed to operate effectively and efficiently in the present and future. T/F
T
Downsizing often means eliminating jobs, which can have an adverse effect on employee morale. T/F
T
Employee training and development cost is an example of an discretionary cost. T/F
T
Engineered costs result from a cause-and-effect relationship between the cost driver output and the resources used to produce that output. T/F
T
One of the five forces of industry analysis is understanding the bargaining power of your input suppliers. T/F
T
Product differentiation is an organization''s ability to offer products or services perceived by its customers to be superior and unique relative to the products or services of its competitors. T/F
T
Reengineering is the fundamental rethinking and redesign of business processes to achieve improvements in critical measures of performance such as cost, quality, service, speed, and customer satisfaction. T/F
T
Strategy describes how an organization matches its own capabilities with the opportunities in the marketplace to accomplish its overall objectives. T/F
T
Successful reengineering efforts generally involve changing the roles and responsibilities of employees. T/F
T
The balanced scorecard translates an organization's mission and strategy into a set of performance measures that provides the framework for implementing its strategy. T/F
T
The balanced scorecard uses financial and nonfinancial performance measures to evaluate short-run and long-run performance in a single report. T/F
T
The cost leadership strategy is for products and services that are similar to competitor's products and services. T/F
T
To achieve success, it is important to set nonfinancial objectives as well as financial objectives. T/F
T
To evaluate the success of its strategy, a company can subdivide the change in operating income into growth, price-recovery, and productivity components. T/F
T
Unused capacity is the amount of productive capacity available over and above the productive capacity employed to meet customer demand in the current period. T/F
T
