Deck 18: Business Strategy, Performance Measurement, and the Balanced Scorecard

Question 1

When an organization starts up, they decide on their mission and vision, and these two components inform every step of their goal achievement. Which of the following best represents the component that determines the path they take to move towards implementing their long-term vision?

A) Goals and objectives
B) Measures and targets
C) Results
D) Strategies and initiatives

Answer 1

Strategies and initiatives

Question 2

When an organization starts up, they decide on their mission and vision, and these two components inform every step of their goal achievement. Which of the following best represents the component that results from coordination of business units across the organization tracking dollars and dates?

A) Goals and objectives
B) Measures and targets
C) Results
D) Strategies and initiatives

Answer 2

Measures and targets

Question 3

When a company is in its planning stage, it must analyze the existing market to plan its path to success. According to Porter, there are five forces that shape the industry a business operates within. Which of the following is one of those five forces?

A) Existing entrants
B) Power of managers
C) Threat of substitutes
D) Threat of suppliers

Answer 3

Threat of substitutes

Question 4

When a company is in its planning stage, it must analyze the existing market to plan its path to success. According to Porter, there are five forces that shape the industry a business operates within. Which of the following is least likely to be considered one of these five forces?

A) Mission and Vision
B) New entrants
C) Power of customers
D) Threat of substitutes

Question 5

Once a company has identified various industry challenges and starts to overcome them, they may choose to use a SWOT analysis. Ideally, this will help the company determine important internal and external areas of concerns. Which of the following represents the correct breakdown of the acronym SWOT?

A) Strengths, Weaknesses, Opportunities, Threats
B) Strengths, Weaknesses, Opportunities, Treats
C) Strengths, Worries, Opportunities, Threats
D) Summaries, Weaknesses, Opportunities, Threats

Question 6

Cost accounting principles are an important component for any organization that assist management in their decision-making. Additionally, managers rely on accountants to interpret data and provide information to help them understand their business in greater depth. Which of the following choices best represents a strategic plan?

A) Derek is an accountant who has compiled some data for management so that they can increase production over the next year.
B) Shawn is a manager who would like to reduce employee turnover and is meeting with human resources to gather data.
C) Suzanne is an accountant who has compiled an expansion plan for a restaurant to franchise locations and eventually operate in five states.
D) Terrance is a manager who would like to see the retail store where he works implement measures to reduce shrinkage and is estimating the cost to do so.

Question 7

Cost accounting principles are an important component of any organization that assist management in their decision-making. Additionally, managers rely on accountants to interpret data and provide information to help them understand their business in greater depth. Which of the following choices best represents an operating plan?

A) Nathan is the manager of an automotive shop who knows that the shop needs more mechanics on staff to expand their service offerings.
B) Susan is a therapist and would like to expand her practice by hiring new therapists over the next few years.
C) Tara is a florist who would eventually like to retire and has enlisted the help of her children to formulate a plan by which they take over control within the next 5 years.
D) Theodore is the manager of a local football team and is using last year's ticket sales data to create a plan to increase ticket sales for the coming year.

Question 8

A company's strategic plan is an integral part of their initial planning and is comprised of five components. Management builds their strategic plan around five specific components to meet their objectives. Which of the following best represents some aspects of a strategic plan in the correct order?

A) Goals and Objectives, Measures and Targets, and Results
B) Goals and Objectives, Strategies and Initiatives, and Mission and Vision
C) Measures and Targets, Results, and Goals and Objectives
D) Mission and Vision, Results, and Strategies and Initiatives

Question 9

A company's strategic plan is an integral part of their initial planning and is comprised of five components. Management builds their strategic plan around five specific components to meet their objectives. Which of the following best represents an incorrect ordering of some of these aspects of a strategic plan?

A) Goals and Objectives, Results, and Strategies and Initiatives
B) Goals and Objectives, Strategies and Initiatives, and Results
C) Mission and Vision, Goals and Objectives, and Measures and Targets.
D) Strategies and Initiatives, Measures and Targets, and Results

Question 10

As part of the process of creating a strategic plan, management will have to decide what is most important to them. Although industries may vary, the general components of a strategic plan have the same general structure. Which of the following best represents the vision component for an art gallery?

A) To be the city's most visited and well-respected avenue of art promotion
B) To connect artists with the communities they reside in
C) To provide an avenue for artists to freely display their craft
D) To use key performance indicators to determine how to best market their artists

Question 11

As part of the process of creating a strategic plan, management will have to decide what is most important to them. Although industries may vary, the general components of a strategic plan have the same general structure. Which of the following best represents the vision component for a coffee shop?

A) To create a welcoming and inviting environment where patrons spend their time working and connecting
B) To provide a well-balanced work environment for baristas
C) To serve the best coffee at the best price with friendly staff
D) To work with local vendors and provide a way to locally source all products

Question 12

A public university has an objective of increasing enrollment in its online programs. The university has an online division where each major program is represented, and they have a representative assigned to each program. How could the university most effectively implement this?

A) Delegating additional enrollment responsibilities to the advisors in each college
B) Delegating the monitoring of day-to-day data to the dean of each college
C) Requiring each college's dean's managers encourage incoming students to consider an online program
D) Requiring faculty engagement in persuading students to enroll in at least one online class per period

Question 13

A public university has an objective of increasing enrollment in its online programs. The university has an online division where each major program is represented, and they have a representative assigned to each program. What is a relevant key performance indicator (KPI) that could be used to measure success?

A) Percentage increase or decrease in number of students enrolled in each program this year compared to other programs
B) Percentage increase or decrease in number of students enrolled in online programs as compared to last year
C) Percentage of formerly enrolled non-online students from last year who have enrolled in an online program this year
D) Percentage of students enrolled in the university who attend online versus taking classes on-campus.

Question 14

The College of Business at a local college has an objective of generating a $500,000 surplus earmarked for a new technology center. The College's technology is severely lacking compared to other area schools. Who would be responsible for ensuring the College of Business meets its objectives?

A) The Accounting and Budget Department of the College of Business
B) The Dean of the College of Business
C) The Department Chairs of the College of Business
D) The President of the University

Question 15

The College of Business at a local college has an objective of generating a $500,000 surplus earmarked for a new technology center. The College's technology is severely lacking compared to other area schools. How will the person in charge of meeting this goal be held accountable and with what potential result?

A) Having a component built into an annual review with no incentivizing aside from potential job security
B) Having a component built into an annual review with raises tied to successes and extensive explanation needed for an unfavorable performance
C) Having an informal meeting with upper management at the end of the project with the potential for a bonus
D) Holding informal meetings with upper management to discuss results with no raises tied to success

Question 16

Businesses use Porter's Five Forces to determine how well companies will be able to generate a profit. To create and implement a successful strategic route, companies will take these five forces into consideration. Which of the following is a good representation of the power of customers?

A) A company changes its bill-payment policy to pay all vendors within 30 days and avoid surcharges.
B) A company changes its return policy to allow a 90-day return window after customers' complaints.
C) A local florist fears a new online florist, so they begin to offer same-day delivery for all bouquets.
D) A sushi restaurant begins to offer home delivery after a local grocery store offers to deliver their own in-house sushi.

Question 17

Businesses use Porter's Five Forces to determine how well companies will be able to generate a profit. To create and implement a successful strategic route, companies will take the five forces into consideration. Which of the following is a good representation of the threat of substitutes?

A) A furniture store is worried about losing customers to a competitor because the competitor offers more favorable credit terms than they can offer.
B) A local Italian restaurant is concerned about the trend of delivery-based meal kits.
C) A local Thai food restaurant is concerned about a Thai food truck that services the same area.
D) A veterinary office is concerned about a local pet store that sells puppies.

Question 18

A company's chosen strategy is the route it uses to arrive its destination. A guiding set of principles for laying out the long-term goals is known as Porter's Five Forces. Which of the following best represents the threat of new entrants?

A) A dress shop opens next to a local boutique that specializes in women's clothing.
B) A fine jewelry store would like to open in a market where three other fine jewelry stores exist.
C) Customers of a clothing boutique learn of an online shop that sells the same clothing.
D) Thrifty Dresses, Inc. changed their credit terms to give preference to online vendors over brick-and-mortar stores.

Question 19

A company's chosen strategy is the route it uses to arrive its destination. A guiding set of principles for laying out the long-term goals is known as Porter's Five Forces. Which of the following best represents the bargaining power of a carrot farmer as a supplier?

A) A carrot farmer gives first choice of their organic crops to the customer who pay their bills fastest.
B) A carrot farmer notices that the farm next door has started to grow and sell beets.
C) A carrot farmer's customers have the option to purchase from a new company that delivers in half the time.
D) The new owner of a carrot farm has decided to switch from carrots to growing and selling tomatoes.

Question 20

Lana is the owner of Leafy Greens, a smoothie store slated to open within the next six months. Lana is in the process of creating her strategic plan and needs to identify her furthest-reaching goals. She knows that this process will take some time to get right and wants to do it properly. Which of the following is an example of a competitive rivalry for Leafy Greens according to Porter's Five Forces?

A) A coffee shop that sells a variety of items including smoothies
B) A farm that sells fresh strawberries to local vendors
C) A health food store that sells hand-pressed juices
D) An ice cream shop that sells ice cream-based drinks like milkshakes

Question 21

Lana is the owner of Leafy Greens, a meal-replacement smoothie store slated to open within the next six months. Lana is in the process of creating her strategic plan and needs to identify her furthest-reaching goals. She knows that this process will take some time to get right and wants to do it properly. Which of the following is an example of a threat of substitutes for Leafy Greens according to Porter's Five Forces?

A) A food truck that will sell smoothies and other items just opened in the area.
B) A meal kit that is available for all meals, including breakfast.
C) A meal kit that is available that allows customers to make fresh salads.
D) A supplier of bananas has decided to offer new credit terms for existing customers.

Question 22

Once a business is ready to move from identifying industry challenges to overcoming them, the company may choose to complete a SWOT analysis. This tool helps the organization identify internal and external factors affecting them. Which of the following is the best breakdown of Internal and External forces in a SWOT analysis?

A) Internal: Opportunities, Threats; and External: Strengths, Weaknesses
B) Internal: Opportunities, Weaknesses; and External: Strengths, Threats
C) Internal: Strengths, Opportunities; and External: Weaknesses, Threats
D) Internal: Strengths, Weaknesses; and External: Opportunities, Threats

Question 23

As a company begins to fine tune its strategy, it is prudent to identify their strengths and weaknesses in addition to outside opportunities and threats. This SWOT analysis will ensure they can effectively evaluate and deal with items that will either help or hurt their chances of success. Which of the following represents a Strength for a mobile dog grooming business?

A) The business is mobile and can move to different markets.
B) The fixed size of the truck used for grooming is limited in space.
C) The mobile grooming business can be expanded without excessive entrance costs.
D) The mobile grooming business can be franchised.

Question 24

As a company begins to fine tune its strategy, it is prudent to identify their strengths and weaknesses in addition to outside opportunities and threats. This SWOT analysis will ensure they can effectively evaluate and deal with items that will either help or hurt their chances of success. Which of the following represents an Opportunity for a mobile dog grooming business?

A) The mobile dog groomer has a great relationship with their existing suppliers.
B) The mobile grooming business is not able to offer all the services that are available at their physical location in the suburbs.
C) Their brick-and-mortar store is in a suburb, and the truck can now travel to local fairs and events in the city.
D) There are existing mobile dog groomers in the area who have older model trucks and grooming technologies.

Question 25

According to Porter, there are five forces that must be assessed and acknowledged by any business who wishes to successfully create an effective strategy. Which of the following best demonstrates the threat of substitutes for a handmade furniture manufacturer?

A) A furniture store that sells ready-to-build pieces from unique designs.
B) A handmade home décor store.
C) A supplier who sells mahogany wood and determines the terms that a potential buyer must meet to buy from them.
D) Another furniture store who also sells handmade furniture.

Question 26

According to Porter, there are five forces that must be assessed and acknowledged by any business who wishes to successfully create an effective strategy. Which of the following best demonstrates the power of a handmade furniture store as a customer?

A) The furniture store can choose credit customers based upon their credit scores.
B) The furniture store will only buy from a supplier who will give them credit terms of 30 days.
C) The furniture store will only sell to customers who can pay in cash.
D) The furniture store will require a down payment from all potential customers on pre-orders.

Question 27

After completing a SWOT analysis, a company begins to set its strategy to advance from its current position. Porter describes a strategy spectrum whereby a company has two choices: cost leadership and product differentiation. Which of the following is a company who has selected a cost leadership strategy?

A) Beauty You is a salon that specializes in trendy haircuts tailored to each client.
B) Cost Mart is a big box store that sells items at the cheapest price in town.
C) Itsy is an online marketplace where vendors sell unique handmade items.
D) Oldies is a vintage car dealership that sells high-end vintage vehicles.

Question 28

After completing a SWOT analysis, a company begins to set its strategy to advance from its current position. Porter describes a strategy spectrum whereby a company has two choices: cost leadership and product differentiation. Which of the following is a company who is not purely a cost leader or a product differentiator but somewhere in the middle of the spectrum?

A) Feltz is a factory that produces felt fabric at the lowest cost possible by using as much automated machining as possible.
B) Freshies is a grocery store that carries unique products and strives to keep their costs as low as possible.
C) Paisley, Inc., is an upscale jewelry store that specializes in the sale of one-of-a-kind necklaces.
D) Turnips is a grocery store that sells product in bulk so it can offer lower per-unit costs to customers.

Question 29

After completing a SWOT analysis, a company begins to set its strategy to advance from its current position. Porter describes a strategy spectrum whereby a company has two choices: cost leadership and product differentiation. Which of the following is a company who selected a product differentiation strategy?

A) Collectibles, Etc., is a collectibles store that specializes in hard-to-find collectibles.
B) IShadows is a makeup line that makes unique palettes combinations sold at drug stores.
C) Society 12 is an online art store that sells art prints for a reasonable price.
D) Woolies is a factory that strives to make affordable and practical wool socks.

Question 30

In addition to Porter's Five Forces and related strategy spectrum, a company could choose to use the complementary framework of customer value proposition. This method requires that each company detail their mix of products, prices, services, relationships, and image. In what way is this strategy like Porter's strategic choices?

A) Both strategic plans contain a subset of additional identification.
B) Both strategies strictly focus on maintaining the best pricing in the market.
C) Both strategies strictly focus on providing the most unique products to their customers.
D) The company must define a mix of what makes up their business.

Question 31

Once a business is ready to move from identifying industry challenges to overcoming them, the company may choose to complete a SWOT analysis. This tool helps the organization identify internal and external factors affecting them. Which of the following correctly aligns with the elements of SWOT?

A) Opportunities: Good relationship with customers.
B) Strengths: The business can franchise its operations.
C) Threats: The business is mobile-only with no brick-and-mortar location.
D) Weaknesses: The business is limited in capacity due to owning a small amount of equipment.

Question 32

In addition to Porter's Five Forces and related strategy spectrum, a company could choose to use the complementary framework of customer value proposition. This method requires that each company make a choice between operational excellence and product leadership. Which of the following represents the mix of items that a company should detail under the framework of customer value proposition?

A) Image, Relationship, Services, Prices, Profits
B) Prices, Services, Profits, Relationship, Products
C) Products, Services, Prices, Image, Power
D) Services, Prices, Image, Products, Relationship

Question 33

Jones Corp. is a newly formed organization that will produce 10-key calculators that it intends to sell to office supply stores and directly from its own online platform. Jones is in the planning stages of their business and are formulating a strategic plan. As part of this initial planning, the owners know that they must first identify a mission and vision. Which of the following best represents a mission for Jones?

A) Jones Corp. calculator will be the calculator of choice for Accountants and CPAs.
B) Jones will be the largest provider of calculators in the US.
C) Jones will produce the best calculators in the world.
D) Jones will provide a calculator that is reliable and cost-efficient.

Question 34

Jones Corp. is a newly formed organization that will produce 10-key calculators that it intends to sell to office supply stores and directly from its own online platform. Jones is in the planning stages of their business and are formulating a strategic plan. As part of this initial planning, the owners know that they must first identify a mission and vision. Which of the following best represents a vision for Jones?

A) Jones will connect accountants through their shared love of 10-key calculators.
B) Jones will have a Jones Corp. calculator in every accountant's office.
C) Jones will make 10-key calculators user-friendly and accessible.
D) Jones will provide financial literacy through the advancement in their technology.

Question 35

Trevor is an aspiring baker who eventually hopes to leave his current full-time job and bake instead. He knows that planning now will make all the difference as he moves towards making his dream a reality. He plans to begin by baking out of his house and eventually open a small brick-and-mortar location. According to Porter's Five Forces, which of the following represents the threat of substitutes for Trevor?

A) Gonuts Donuts is a bakery that his friend Jerry wants to open sometime in the next few years.
B) Poofy Pastries is a small bakery that is in the same town as Trevor.
C) Tasty Bites delivers an at-home baking kit available at a local grocery.
D) Treats on the Go is a mobile bakery truck that frequents a nearby farmer's market.

Question 36

Trevor is an aspiring baker who eventually hopes to leave his current full-time job and bake instead. He knows that planning now will make all the difference as he moves towards making his dream a reality. He plans to begin by baking out of his house and eventually open a small brick-and-mortar location. According to Porter's Five Forces, which of the following represents competitive rivalry for Trevor?

A) Delicious Desserts sells a pre-packaged box of gluten-free cake mix available at the grocery store.
B) Lars is a local baker would also like to start a bakery, Lars' Treats, in the same timeframe as Trevor.
C) Lisa is a local baker with a shop, Lisa's Pastries, near Trevor's home.
D) You Bake It! sells a take-home kit that contains ingredients to make cookies at home.

Question 37

As an organization fine-tunes its strategies and defines its objectives, management will disseminate these strategies and objectives to various levels of the organization. While distributing tasks to other employees, management should ensure outcomes remain congruent with their intentions. Which of the following best represents one of the steps used to make sure this succeeds?

A) Employees constantly undertake tasks to move the company closer to its vision.
B) Employees occasionally undertake tasks to move the company closer to its vision.
C) Responsibilities and the authority to fulfill these are assigned solely by seniority.
D) Responsibilities and the authority to fulfill these are assigned by both seniority and job description.

Question 38

An insurance company owns and operates an office building downtown. The company employs its own staff to perform tasks including building cleaning and maintenance. This organization also operates its insurance business unit from within that building. Management is evaluating the type of compensation offered to individuals with various roles within the company. Which of the following would be the most appropriate type of compensation for the janitorial staff who are utilized to clean and maintain the building?

A) Commission
B) Hourly wage
C) Piece rate
D) Salary

Question 39

An insurance company owns and operates an office building downtown. The company employs its own staff to perform tasks including building cleaning and maintenance. This organization also operates its insurance business unit from within that building. Management is evaluating the type of compensation offered to individuals with various roles within the company. Which of the following is the most appropriate type of compensation for the insurance agents charged with selling policies?

A) Commission
B) Hourly wage
C) Piece rate
D) Salary

Question 40

Nonfinancial performance measures are often helpful to organizations when they evaluate actions that are being taken now to achieve success later. Which of the following is most likely to be a nonfinancial performance measure utilized by the Sales and Marketing Department?

A) Employee satisfaction as an indicator of how satisfied employees are with the company
B) Internal promotion rate as a measure of how quickly high-performing employees advance within the company
C) Net promoter score as a score based on how likely it is a customer will recommend this company to others
D) Vacation days earned versus used as a measure of whether staff takes time to enjoy their life outside of work

Question 41

Nonfinancial performance measures are often helpful to organizations when they evaluate actions that are being taken now to achieve success later. Which of the following is most likely to be a nonfinancial performance measure utilized by the Human Resources Department?

A) Customer conversion rate to measure the percentage of interactions with customers that end with a sale
B) Efficiency as a measure of the number of units that are being produced every hour
C) Internal promotion rate to track the rate that high-performing employees advance within the company.
D) Net promoter score to score how likely it is a customer will recommend this company to others.

Question 42

A company wishes to assess certain financial performance measures to assess their operations for the current year. Management believes this will be an effective way to assess certain aspects as the financial measures are both objective and measurable. If the organization would like to evaluate how effective the organization is at collecting receivables, then which of the following performance measures should they use?

A) Accounts receivable turnover
B) Net income growth
C) Gross margin
D) Operating cash flow

Question 43

Kevin is an employee in the finance department at Easy Trader Co. and is performing some financial analysis on their current year's performance. Before he can begin looking at a variety of nonfinancial factors, including customer conversion rates and internal promotion scores, he will need to evaluate some financial performance measures. Which of the following provides the most accurate rationale for evaluating Residual Income?

A) Comparing a company's return in relation to income for year-to-year analysis
B) Determining a company's ability to mark-up from cost
C) Evaluating a company's actual costs to its budgeted expectations
D) Evaluating income earned beyond the minimum required return on investment

Question 44

Kevin is an employee in the finance department at Easy Trader Co. and is performing some financial analysis on their current year's performance. Before he can begin looking at a variety of nonfinancial factors, including customer conversion rates and internal promotion scores, he will need to evaluate some financial performance measures. Which of the following provides the most accurate rationale for evaluating Economic Value Added?

A) Evaluating after-tax income earned beyond the company's cost of capital on its invested capital
B) Evaluating income earned beyond the minimum required investment
C) Evaluating profitability using a consistent measure like earnings without interest
D) Understanding the cash implications of a company's primary operating activities

Question 45

The accounting department of Stryker Inc. is putting together a financial analysis for management. They are focusing on performance measures and pulled together information from the two most recent years. If the accounting department wants to focus solely on financial measures, then how would you respond?

A) This is a great idea since a company's numerical performance plays a larger part in its success or failure than nonfinancial measures do.
B) This is a great idea since the numbers and stories tell management about everything going on with the company.
C) This is not a great idea since nonfinancial measures provide a much clearer and more accurate picture of how a company performed during the period under review.
D) This is not a great idea since one form of measurement alone may not be enough to paint a complete picture of the company's performance.

Question 46

The accounting department of Stryker Inc. is putting together a financial analysis for management. They are focusing on performance measures and pulled together information from the two most recent years. If the accounting department would like to evaluate financial measures, then what is an appropriate choice for that evaluation?

A) Evaluating all efforts exerted to drive financial results
B) Evaluating the likelihood a customer would recommend Stryker to their friend
C) Evaluating the operating, investing, and financing activities of the company
D) Evaluating what markets are underserved in the industry

Question 47

As an organization fine-tunes its strategies and defines its objectives, management will disseminate these strategies and objectives to various levels of the organization. While distributing tasks to other employees, management should ensure that outcomes remain congruent with their intentions. Which of the following best represents an example of goal congruence?

A) Don is a salesperson tasked with double-checking payroll figures to diversify his skillset.
B) John is an HR representative tasked with shadowing a salesperson to increase his understanding of that position.
C) Sharon is an accountant tasked with creating a new ad campaign to attract customers.
D) Tara is an administrative assistant tasked with teaching a new secretary the organization's required skillset for serving customers.

Question 48

A football team knows that to accomplish their goals, those goals need to range from high-level organizational thinking to each individual player. The team has the following levels: franchise, team, and individual. What is an objective that would likely appear at both the team and individual levels?

A) Attract the best players from across the country.
B) Play each game with the level of intensity of a championship.
C) Reduce the penalty yardage per player.
D) Win a major championship within five years.

Question 49

A football team knows that to accomplish their goals, those goals need to range from high-level organizational thinking to each individual player. The team has the following levels: franchise, team, and individual. What is an objective that would likely appear at the franchise level?

A) Encourage team to ensure best outcome each game.
B) Fill the stadium seats to at least 89% capacity for each game.
C) Increase number of touchdowns per game.
D) Play each game to win.

Question 50

Once a business is ready to grow, they hire qualified candidates to work for them. The type of compensation offered and any additional offerings will vary depending on the job. Why is it important for companies to select the correct type of compensation?

A) Appropriate compensation for each job ensures employees make just enough money to keep them from leaving.
B) If compensation and performance align, then both act as motivators for employees.
C) If compensation and performance are misaligned, then both will negatively motivate employees.
D) The correct compensation for each job discourages employees from discussing compensation with one another.

Question 51

Once a business is ready to grow, they hire qualified candidates to work for them. The type of compensation offered and additional offerings will vary depending on the job. If a company is looking to hire sales staff, then what would the most appropriate form of compensation be?

A) Commission will motivate sales employees to increase company revenues since their sales will directly tie to their income.
B) Hourly wages will incentivize them to spend more time with potential clients.
C) Salary will be most appropriate for them, as it is a long-term position where payment depends on outcomes rather than hours logged.
D) Stock options will reward sales staff for making sales and also ensure their compensation is unpredictable.

Question 52

One of the most crucial components of having employees is to make sure their evaluations are both fair and appropriate. From an employee's perspective, there are five significant aspects of the performance evaluation process. Which of the following best represents the communication perspective?

A) Dale receives an email from HR addressing his frequent absenteeism.
B) John has an annual review process where he receives feedback about his performance.
C) Sandra has sit-down meeting with her manager to discuss methods for increasing her effectiveness.
D) Sheryl and her manager work together to establish her goals for the upcoming year.

Question 53

One of the most crucial components of having employees is to make sure their evaluations are both fair and appropriate. From an employee's perspective, there are five significant aspects of the performance evaluation process. Which of the following best represents the compensation perspective?

A) Andrea's manager has set up a meeting to discuss a recent conflict with a coworker.
B) Michael gives one of his employees some feedback on a recent project.
C) Samantha is up for consideration for a promotion based upon her most recent sales metrics.
D) Trevor is completing a self-evaluation form before his yearly performance review.

Question 54

From an employee's perspective, one of the most important aspects of working for an organization is to be evaluated fairly. For the performance evaluation process, there are aspects from this perspective and each is important. Which of the following best represents the mentoring perspective?

A) Daisy received formal feedback from her manager on her work.
B) Mark and his manager go out to eat occasionally to discuss his future.
C) Mary reviewed her team's work and is documenting feedback with the intent of improving their performance.
D) Stanley received a bonus for the year because he had record-setting sales this year.

Question 55

From an employee's perspective, one of the most important aspects of working for an organization is to be evaluated fairly. For the performance evaluation process, there are aspects from this perspective and each is important. Which of the following best represents the personal goals perspective?

A) Angela requested a salary rather than an hourly wage since that is more in-line with her job duties.
B) Austin schedules a meeting with his manager to ask for suggestions on improving his performance.
C) HR emails Ryan a reminder about the company's paid time off policy since it changed recently.
D) Tamara meets with her manager to discuss her goals for the next quarter and how those goals fit into the larger vision of the organization.

Question 56

Performance measurement is an important pillar of an organization's management control system, and while these pillars are consistent, each business is likely to use different approaches for each one. Performance measurement is the fourth pillar and is an anchor in the process. Which of the following is representative of effective performance measurement in the setting of a college classroom?

A) Clearly communicate requirements to students, but notify them that there are no further reminders of expectations.
B) Ensure students receive timely feedback so they can adjust their behavior if needed.
C) Shrink the scope of their responsibility as the students progress to avoid overwhelming them.
D) Wait until midterms return grades to students and give them your feedback.

Question 57

Performance measurement is an important pillar of an organization's management control system, and while these pillars are consistent, each business is likely to use different approaches for each one. Performance measurement is the fourth pillar and is an anchor in the process. Which of the following is representative of effective performance measurement in a call center environment?

A) Assign the most challenging calls to the newest employees to motivate them.
B) Clearly communicate call center goals using posters and management correspondence.
C) Give feedback about performance on an annual review.
D) Make sure employees know all calls are recorded and reinforce the consequences for missing targets.

Question 58

One important aspect of performance measurement is appropriately assigning responsibility based on the level of employee in the hierarchy of the company. If done incorrectly or in an imbalanced fashion, then employees may feel as though they have an unfair work environment. Which of the following responsibilities would be more appropriate to assign to a staff-level employee?

A) To increase sales by four percent within the next two months.
B) To recruit new staff for the art department so that they can continue to internally promote.
C) To reduce the company's employee turnover.
D) To research and visit new potential markets.

Question 59

One important aspect of performance measurement is appropriately assigning responsibility based on the level of employee in the hierarchy of the company. If done incorrectly in an imbalanced fashion, then employees may feel as though they have an unfair work environment. Which of the following responsibilities would be more appropriate for upper management?

A) Hire a new payroll employee within the next week to fill a vacancy.
B) Increase gross margin by ten percent during the second quarter of the New Year.
C) Perform an analysis based on last year's sales data, and compile a report.
D) Reduce workforce shrinkage by five percent in next holiday season.

Question 60

Companies will investigate and integrate tools to effectively evaluate themselves from both a financial and nonfinancial perspective. Both perspectives come with advantages and can assist in painting a more complete picture of how a business has performed. Why would a company choose to look at a nonfinancial measure?

A) The company is concerned with its performance during the last fiscal year.
B) The company is evaluating their sales tactics to determine what is effective for them.
C) The company is not concerned with changing events as they transpire.
D) The company would like to investigate whether there has been an increase in Accounts Receivable turnover.

Question 61

Companies will investigate and integrate tools to effectively evaluate themselves from both a financial and nonfinancial perspective. Both come with various advantages and can assist in painting a more complete picture of how a business has performed. Why would a company choose to look at a financial measure?

A) The company has concerns about its Earnings per Share trends over the past five years.
B) The company is more concerned with ongoing performance as compared to how numbers ended in the most recent fiscal year.
C) The company would like to better understand why their inventory turnover has decreased.
D) The company would like to determine whether it should increase spending on research and development to increase variety in customer offerings.

Question 62

A small ceramics company is compiling data about its performance during the last two fiscal years. They reported the following: Using the information above, what is their after-tax income for year 1?

A) $104,244.19
B) $241,744.19
C) $312,732.75
D) $416,977.00

Question 63

A small ceramics company is compiling data about its performance during the last two fiscal years. They reported the following: Using the information above, what is their after-tax income for year 2?

A) $125,000.00
B) $275,000.00
C) $375,000.00
D) $500,000.00

Question 64

The owner of a local pet supply store fears their efforts to increase the store's gross profit and net income are futile. They have compiled the following information from their financial statements over the last 2 years: What is the percent difference in the Gross Margin ratio for year 2 compared to year 1? (Round the gross margin for years 1 and 2 to two decimal places.)

A) The percentage differs between years 1 and 2 by 12.35%.
B) The percentage differs between years 1 and 2 by 14.18%.
C) The percentage differs between years 1 and 2 by 14.86%.
D) There is no difference in the Gross Margin ratio percentage between those two years.

Question 65

The owner of a local pet supply store fears their efforts to increase the store's gross profit and net income are futile. They compiled the following information from their financial statements over the last 2 years: Using horizontal analysis, what is the percent change in the Profit Margin ratio for year 2 compared to year 1? (Round profit margin ratios for years 1 and 2 to two decimal places.)

A) The store reported 10.09% change in its profit margin ratio from Year 2 compared to Year 1.
B) The store reported 14.18% change in its profit margin ratio from Year 2 compared to Year 1.
C) The store reported 14.09% change in its profit margin ratio from Year 2 compared to Year 1.
D) The store reported 14.86% change in its profit margin ratio from Year 2 compared to year 1.

Question 66

A local lawn care business is considering changing their credit policy for customers. Their accountant gathered the following information to help management decide. The lawn care business would like to switch to an all-cash sales system since they currently collect only 72% of their credit sales. If they implement this change, then how would that impact the business?

A) The company would experience an increase in cash collections since they have switched to all-cash sales system.
B) The business would likely acquire new customers that like a business who sets strict terms.
C) The company would experience an increase in net income since they would have increased collection of sales.
D) The company would experience an increase in gross profit since they would have increased collection of sales.

Question 67

A local lawn care business is considering changing their credit policy for customers. Their accountant gathered the following information to help management decide. The lawn care business would like to switch to an all-cash sales system since they are collecting only 72% of their credit sales. The management team is not unanimously on board with the idea of making this change. Which of the following reasons is the most likely reason the management team is not on the same page?

A) Existing customers may choose to take their business elsewhere since they like the product offerings of a competitor.
B) Existing customers may choose to take their business elsewhere so they can have more generous terms and will not have to rely on cash for transactions.
C) New customers may choose to go with a competitor due to a more desirable delivery schedule.
D) New customers may choose to go with a competitor due to better discounts offered as part of a promotional credit.

Question 68

Global Dynamics is a large corporation with offices throughout the United States. They specialize in helping businesses grow and tackle issues with staffing and overall logistics. Global Dynamics has a variety of departments including accounting, human resources, sales, and customer service. Which of the following best represents a task for a staff accountant at Global Dynamics?

A) Devise a plan for a ten percent improvement in the collection of Accounts Receivable over the next five years.
B) Implement a plan for a five percent reduction in the days' sales in receivables over the next month.
C) Reduce employee turnover in the accounting department within the next six months.
D) Reduce the number of days the monthly closing process takes over the next few months.

Question 69

Global Dynamics is a large corporation with offices throughout the United States. They specialize in helping businesses grow and tackle issues with staffing and overall logistics. Global Dynamics has a variety of departments including accounting, human resources, sales, and customer service. Which of the following best represents a task for the Chief Information Officer at Global Dynamics?

A) Create a new company policy to enhance security and reduce the likelihood of employees falling prey to cyberthreats.
B) Create a new company policy to enhance security and reduce the likelihood of cyberthreats to employees by ten percent.
C) Distribute a new communication policy within a week that disseminates information about appropriate company computer usage.
D) Gather estimates for new anti-virus software that the company would like to purchase and install by the end of the year.

Question 70

Stucker Corp. just started their annual company-wide evaluation of the most recent year's performance. Management will look at many financial and nonfinancial measures as part of this comprehensive review. Their accountant compiled the following information:
Sales: $9,320,568
Operating Expenses: $7,623,004
Weighted Average Common Shares Outstanding ($2 per share): $12,467,200
If the company does not have preference shares and there is no income tax, then how much will their earnings per share (EPS) be for the year?

A) $0.14
B) $0.27
C) $0.75
D) $1.50

Question 71

Stucker Corp. just started their annual company-wide evaluation of the most recent year's performance. Management looks at many financial and nonfinancial measures as part of this comprehensive review. Their accountant compiled the following information:
Sales: $9,320,568
Operating Expenses: $7,623,004
Weighted Average Common Shares Outstanding ($2 per share): $12,467,200
If the company has $52,000 of preferred dividends and there is no income tax, then how much will their earnings per share be for the year?

A) $0.26
B) $0.27
C) $0.75
D) $1.49

Question 72

Simone is a staff accountant for a local factory and has been asked to gather data and perform some analysis by the end of the week for the annual financial performance review. She compiled the following information: Assume that expenses do not include depreciation, amortization, or interest. What is the difference between earnings before interest and taxes (EBIT) for Years 1 and 2?

A)$36,490 decrease
B) $51,490 increase
C) $54,506 decrease
D) $54,506 increase

Question 73

Simone is a staff accountant for a local factory, and she has been asked to gather data and perform some analysis by the end of the week for the annual financial performance evaluation. She compiled the following information: Assume that expenses do not include depreciation, amortization, or interest. What is the difference between earnings before interest, taxes, depreciation, and amortization (EBITDA) for Years 1 and 2?

A) $36,490 increase
B) $51,490 decrease
C) $54,506 decrease
D) $74,010 increase

Question 74

Carrie is currently a full-time employee at a law firm, and she also makes and sells jewelry online in her personal time. She is trying to evaluate her side business in terms of financial measures. The online shop generated the following numbers on average per month: Sales, $4,316.00; Variable Costs, $1,809.00; and Fixed Costs, $762.00. Carrie sold 1,144 units per month. What is Carrie's annualized operating margin? (Round your answer to two decimal places.)

A) 40.36%
B) 40.43%
C) 58.09%
D) 82.34%

Question 75

Carrie is currently a full-time employee at a law firm, and she also makes and sells jewelry online in her personal time. She is trying to evaluate her side business in terms of financial measures. The online shop has generated the following numbers on average per month: Sales, $4,316.00; Variable Costs, $1,809.00; and Fixed Costs, $762.00. Carrie sold 1,144 units per month. What is Carrie's annualized operating income if Carrie sold 1,200 units per month instead of her current monthly average? (Round intermediate calculations to two decimal places.)

A) $20,940.00
B) $22,392.00
C) $31,536.00
D) $45,144.00

Question 76

Kelsey has been making soy candles for friends and family for many years. Recently she debated making an official website to sell her candles to the general public. Her variable cost is $4.20 per unit, and she would sell each candle for $10.00. Her fixed costs will be $418.00 per month. How many units would she need to sell per year to completely replace her current annual salary of $36,450? Round your final answer to the nearest whole unit.

A) 4,941 units
B) 5,419 units
C) 7,150 units
D) 36,450 units

Question 77

Kelsey has been making soy candles for friends and family for many years. Recently she debated making an official website to sell her candles to the general public. Her variable cost is $4.20 per unit, and she would sell each candle for $10.00. Her fixed costs will be $418.00 per month. How many units would she need to sell per month, on average, to completely replace her monthly salary of $4,268? Round your final answer to the nearest whole unit.

A) 370 units
B) 663 units
C) 664 units
D) 808 units

Question 78

Trevor sculpts unique vases for houseplant when he is not working as a full-time vet technician at a small, family practice. Trevor's side business has grown exponentially, and he would like to hire someone to help manage the online ordering system and pack orders for shipment. Currently, the monthly costs of his business include: Variable Costs of $10.00 per unit and fixed costs of $773.00. Hiring an assistant would increase his monthly costs by $5,423.00. If Trevor decides to hire the assistant, then how many additional units would he have to sell in a year to generate an annual operating income of $37,823 if the sales price is $18.00 per unit? Round final answer to the nearest whole unit.

A) 519 units
B) 6,228 units
C) 9,527 units
D) 14,022 units

Question 79

Trevor sculpts unique vases for houseplant when he is not working as a full-time vet technician at a small, family practice. Trevor's side business has grown exponentially, and he would like to hire someone to help manage the online ordering system and pack orders for shipment. Currently, the monthly costs of his business include: Variable Costs of $10.00 per unit and fixed costs of $773.00. Trevor wants to make an annual operating income of $37,823 at a sales price of $18.00 per unit. How many of these units would Trevor have to sale working on his own? Round final answer to the nearest whole unit.

A) 2,102 units
B) 5,888 units
C) 5,911 units
D) 6,232 units

Question 80

In an effort to balance financial and nonfinancial performance measures, an organization may choose a balanced scorecard (BSC). Manufacturers, service entities, and governmental organizations often use this tool to assess performance. Which of the following best represents the four traditional perspectives provided by BSC?

A) Financial, Customer, External Business Process, Learning and Growth
B) Financial, Customer, Internal Business Process, Learning and Growth
C) Financial, Customer, Internal Business Purpose, Learning and Growth
D) Financial, Vendor, Internal Business Process, Learning and Growth