Question 1

A key benefit of using the balanced scorecard to evaluate business performance is that:

Accepted Answer

A) it is simple to implement. 
B) individual performance measures each have their limitations; the balanced scorecard gives a broader picture of performance. 
C) it is limited to financial measures, and so it keeps the focus on the "bottom line". 
D) it is a standardized measure, and so it can be readily used to compare companies in different industries on a consistent basis. 
A) it is simple to implement. 
B) individual performance measures each have their limitations; the balanced scorecard gives a broader picture of performance. 
C) it is limited to financial measures, and so it keeps the focus on the "bottom line". 
D) it is a standardized measure, and so it can be readily used to compare companies in different industries on a consistent basis.

Question 2

Innovation, operations and post-sales service are key factors related to which of the four perspectives of a balanced scorecard?

Accepted Answer

A) Financial perspective 
B) Customer perspective 
C) Internal business perspective 
D) Learning and growth perspective 
A) Financial perspective 
B) Customer perspective 
C) Internal business perspective 
D) Learning and growth perspective

Question 3

In a balanced scorecard system, the key performance indicators (KPIs)are ways to measure whether the company is meeting its goals.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following statements MOST accurately describes asset turnover?

Accepted Answer

A) How efficiently a division uses its average assets to generate sales 
B) How much operating income the division earns on every dollar of sales 
C) How much return a division generates on average assets 
D) How much extra income does a division generate above the minimum acceptable level 
A) How efficiently a division uses its average assets to generate sales 
B) How much operating income the division earns on every dollar of sales 
C) How much return a division generates on average assets 
D) How much extra income does a division generate above the minimum acceptable level

Question 5

Real-time feedback on quality is a measure pertaining to the balanced scorecard's:

Accepted Answer

A) learning and growth perspective. 
B) internal business perspective. 
C) financial perspective. 
D) customer perspective. 
A) learning and growth perspective. 
B) internal business perspective. 
C) financial perspective. 
D) customer perspective.

Question 6

Which of the following is NOT a relevant performance indicator for the balanced scorecard's financial perspective?

Accepted Answer

A) Earnings per share 
B) Revenue growth 
C) Return on investment 
D) Number of repeat customers 
A) Earnings per share 
B) Revenue growth 
C) Return on investment 
D) Number of repeat customers

Question 7

Assume the Apple division of the Gala Company had the following results last year.   Management's required rate of return is 10% and the weighted average cost of capital is 8%. Its effective tax rate is 30%. What is Apple division's return on investment?

Accepted Answer

A) 11.11% 
B) 16.67% 
C) 66.67% 
D) 60.00% 
A) 11.11% 
B) 16.67% 
C) 66.67% 
D) 60.00%

Question 8

Many companies use a balanced scorecard for performance evaluation. The balanced scorecard has four business perspectives, and utilizes KPIs to evaluate performance in various areas. Which of the following KPIs would relate to the learning and growth perspective?

Accepted Answer

A) Hours of employee training 
B) Number of warranty claims 
C) Percentage of market share 
D) Return on investment 
A) Hours of employee training 
B) Number of warranty claims 
C) Percentage of market share 
D) Return on investment

Question 9

The central reservations office at American Airlines is most likely treated as a(n):

Accepted Answer

A) cost center. 
B) revenue center. 
C) profit center. 
D) investment center. 
A) cost center. 
B) revenue center. 
C) profit center. 
D) investment center.

Question 10

The performance measurement system should compare the company's performance against the best practices in the industry. This statement reflects which of the following performance measurement goals?

Accepted Answer

A) Motivating unit managers 
B) Promoting goal congruence 
C) Providing feedback 
D) Benchmarking 
A) Motivating unit managers 
B) Promoting goal congruence 
C) Providing feedback 
D) Benchmarking

Question 11

In a balanced scorecard system, if customer satisfaction was one of the critical factors, which of the following would be a relevant KPI?

Accepted Answer

A) Revenue growth 
B) Production yield rate 
C) Market share 
D) Employee training hours 
A) Revenue growth 
B) Production yield rate 
C) Market share 
D) Employee training hours

Question 12

Johnson Construction Materials Company has a sales office which sells concrete culvert pipe to property developers. The sales office is a revenue center and must prepare a monthly performance report. Please view the partially completed performance report below:   A company uses management by exception to address flexible budget variances. On which variance would the company focus first?

Accepted Answer

A) 40 inch 
B) 26 inch long 
C) 36 inch short 
D) 32 inch 
A) 40 inch 
B) 26 inch long 
C) 36 inch short 
D) 32 inch

Question 13

Manufacturing cycle time is a measure pertaining to the balanced scorecard's:

Accepted Answer

A) learning and growth perspective. 
B) internal business perspective. 
C) financial perspective. 
D) customer perspective. 
A) learning and growth perspective. 
B) internal business perspective. 
C) financial perspective. 
D) customer perspective.

Question 14

In a balanced scorecard system, if operational efficiency was one of the critical factors, which of the following would be a relevant KPI?

Accepted Answer

A) Revenue growth 
B) Production yield rate 
C) Market share 
D) Employee training hours 
A) Revenue growth 
B) Production yield rate 
C) Market share 
D) Employee training hours

Question 15

Assume the Apple division of the Gala Company had the following results last year.   Management's required rate of return is 10% and the weighted average cost of capital is 8%. Its effective tax rate is 30%. What is Apple division's EVA?

Accepted Answer

A) $14,000 
B) $14,760 
C) $15,535 
D) $16,220 
A) $14,000 
B) $14,760 
C) $15,535 
D) $16,220

Question 16

Zhongfang Consumer Products has a small car division that operates as a profit center. Below is a partially completed performance report for the first quarter.   How much is the percentage variance for variable expenses?

Accepted Answer

A) 1.7 % F 
B) 1.7 % U 
C) 3.4 % U 
D) 3.4 % F 
A) 1.7 % F 
B) 1.7 % U 
C) 3.4 % U 
D) 3.4 % F

Question 17

Which one of the following is NOT a goal of a performance evaluation system?

Accepted Answer

A) Communicating expectations 
B) Formulating a budget 
C) Motivating unit managers 
D) Providing feedback 
A) Communicating expectations 
B) Formulating a budget 
C) Motivating unit managers 
D) Providing feedback

Question 18

Huntswell Corporation has two major divisions: Agricultural Products and Industrial Products. Data for the year just finished is as follows:   For the Industrial Division, how much is the residual income?

Accepted Answer

A) $2,400 
B) $1,650 
C) ($200) 
D) ($1,600) 
A) $2,400 
B) $1,650 
C) ($200) 
D) ($1,600)

Question 19

Customer satisfaction, operational efficiency, and employee excellence are the three primary considerations when using the balanced scorecard approach.

Accepted Answer

A) True 
 B)False

Question 20

Managers of profit centers are responsible for generating revenue and controlling costs, so their performance reports include both revenues and expenses.

Accepted Answer

A) True 
 B)False

Exam 24: Performance Evaluation and the Balanced Scorecard

A key benefit of using the balanced scorecard to evaluate business performance is that:

Innovation, operations and post-sales service are key factors related to which of the four perspectives of a balanced scorecard?

In a balanced scorecard system, the key performance indicators (KPIs)are ways to measure whether the company is meeting its goals.

Which of the following statements MOST accurately describes asset turnover?

Real-time feedback on quality is a measure pertaining to the balanced scorecard's:

Which of the following is NOT a relevant performance indicator for the balanced scorecard's financial perspective?

Assume the Apple division of the Gala Company had the following results last year. Management's required rate of return is 10% and the weighted average cost of capital is 8%. Its effective tax rate is 30%. What is Apple division's return on investment?

Many companies use a balanced scorecard for performance evaluation. The balanced scorecard has four business perspectives, and utilizes KPIs to evaluate performance in various areas. Which of the following KPIs would relate to the learning and growth perspective?

The central reservations office at American Airlines is most likely treated as a(n):

The performance measurement system should compare the company's performance against the best practices in the industry. This statement reflects which of the following performance measurement goals?

In a balanced scorecard system, if customer satisfaction was one of the critical factors, which of the following would be a relevant KPI?

Manufacturing cycle time is a measure pertaining to the balanced scorecard's:

In a balanced scorecard system, if operational efficiency was one of the critical factors, which of the following would be a relevant KPI?

Assume the Apple division of the Gala Company had the following results last year. Management's required rate of return is 10% and the weighted average cost of capital is 8%. Its effective tax rate is 30%. What is Apple division's EVA?

Zhongfang Consumer Products has a small car division that operates as a profit center. Below is a partially completed performance report for the first quarter. How much is the percentage variance for variable expenses?

Which one of the following is NOT a goal of a performance evaluation system?

Huntswell Corporation has two major divisions: Agricultural Products and Industrial Products. Data for the year just finished is as follows: For the Industrial Division, how much is the residual income?

Customer satisfaction, operational efficiency, and employee excellence are the three primary considerations when using the balanced scorecard approach.

Managers of profit centers are responsible for generating revenue and controlling costs, so their performance reports include both revenues and expenses.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandising Inventory

Internal Control and Cash

Receivables

Plant Assets and Intangibles

Current Liabilities and Payroll

Long-Term Liabilities, Bonds Payable, and Classification of Liabilities on the Balance Sheet

Corporations: Paid-In Capital and the Balance Sheet

Corporations: Effects on Retained Earnings and the Income Statement

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Management Accounting

Job Order and Process Costing

Activity-Based Costing and Other Cost Management Tools

Cost-Volume-Profit Analysis

Short-Term Business Decisions

Capital Investment Decisions and the Time Value of Money

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

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