7/25/2019 chapter 2 TB.doc http://slidepdf.com/reader/full/chapter-2-tbdoc 1/27 Management Accounting, 6e (Atkinson et al.) Chapter 2 The Balanced Scorecard and Strategy Map Objective 1 1) Database and information systems are physical assets which create distinctive value for companies. Answer: FAL! !"planation: Database and information systems are intan#ible assets Diff: 1 $erms: database and information systems Objective: 1 AA%&: 'eflective thin(in# ) $he roles of performance measurement systems in or#ani*ations include all of the followin# !+%!,$: A) motivate employees to help the or#ani*ation achieve its strate#ic objectives. &) help mana#ers with resource allocation. %) create value from intan#ible assets as well as their physical and financial assets. D) communicate the company-s strate#ic objectives. Answer: % Diff: 1 $erms: performance measurement systems Objective: 1 AA%&: 'eflective thin(in# ) /any intan#ible assets: A) do not appear on the balance sheet since it is difficult to place a reliable financial value on them. &) should be evaluated with 'O0 and other performance measures. %) can be measured and mana#ed with current financial control systems. D) are unimportant because they have no physical substance. Answer: A Diff: $erms: intan#ible assets Objective: 1 AA%&: 'eflective thin(in# 1 *You can buy complete chapters by: Www.TestbankU.com Contact Us: [email protected]
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1) Database and information systems are physical assets which create distinctive value forcompanies.
Answer: FAL!
!"planation: Database and information systems are intan#ible assetsDiff: 1
$erms: database and information systems
Objective: 1
AA%&: 'eflective thin(in#
) $he roles of performance measurement systems in or#ani*ations include all of the followin#
!+%!,$:
A) motivate employees to help the or#ani*ation achieve its strate#ic objectives.&) help mana#ers with resource allocation.
%) create value from intan#ible assets as well as their physical and financial assets.D) communicate the company-s strate#ic objectives.
Answer: %
Diff: 1$erms: performance measurement systems
Objective: 1
AA%&: 'eflective thin(in#
) /any intan#ible assets:
A) do not appear on the balance sheet since it is difficult to place a reliable financial value onthem.&) should be evaluated with 'O0 and other performance measures.
%) can be measured and mana#ed with current financial control systems.
D) are unimportant because they have no physical substance.Answer: A
Diff:
$erms: intan#ible assets
Objective: 1AA%&: 'eflective thin(in#
1
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) 0ntan#ible assets that are currently reported on the balance sheet include:
A) loyal and profitable customer relationships.
&) or#ani*ational culture.%) employee s(ills and motivation.
D) the cost of a patent #ivin# e"clusive ri#hts to a process.
Answer: DDiff: 1
$erms: intan#ible assets
Objective: 1AA%&: 'eflective thin(in#
2) $he sayin# 3what #ets measured #ets done3 refers to measurin# performance:A) so that appropriate disciplinary actions can be ta(en.
&) to ensure that employees perform e4ually in all dimensions of their jobs.
%) so that essential tas(s #et accomplished.D) to ensure that the ethical code of conduct is also bein# enforced.
Answer: %
Diff: 1$erms: performance measurement
Objective: 1
AA%&: 'eflective thin(in#
5) 6ive at least two e"amples of intan#ible assets. Are intan#ible assets critical for success7
!"plain.
Answer: 8es9 business has moved from the industrial a#e into the information a#e where(nowled#ebased intan#ible assets create value and are critical for success. !"amples include
loyal and profitable customer relationships9 hi#h4uality processes9 innovative products and
services9 employee s(ills and motivation9 and database and information systems.Diff:
$erms: intan#ible assets
Objective: 1AA%&: Analytical s(ills
/AL: $his 4uestion is not available in /yAccountin#Lab.
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1) A chain of causeandeffect relationships that appropriately lin( the four balanced scorecard perspectives is:
A) a hi#h return on investment causes customer loyalty that results in s(illed production wor(ers
that improve process 4uality.&) s(illed production wor(ers help to produce process 4uality that results in customer loyalty
that helps to increase return on investment.
%) customer loyalty results in a hi#h return on investment that results in the ability to attracts(illed production wor(ers that improve process 4uality.
D) improved process 4uality results in a hi#h return on investment that causes customer loyalty
that results in the ability to attract s(illed production wor(ers.
Answer: &Diff:
$erms: balanced scorecard
Objective:
AA%&: 'eflective thin(in#
12) Defect rates for products and yield percenta#es in manufacturin# are measures of 4ualityincluded in the perspective of the &alanced corecard.
A) financial
&) production%) process
D) internal
Answer: %
Diff: $erms: process perspective
Objective:
AA%&: 'eflective thin(in#
15) 0f a performance measure in the customer perspective of the &alanced corecard wascustomer loyalty9 then a driver from the process perspective would /O$ li(ely be:
A) implementin# cuttin#ed#e technolo#y.
&) repeat sales.
%) hi#h4uality production processes.D) increased profits.
Answer: %
Diff: $erms: customer perspective
Objective:
AA%&: 'eflective thin(in#
5
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1=) 0f process perspective measure from the &alanced corecard was shorter cycle times9 then a
driver from the learnin# and #rowth perspective would /O$ li(ely be to:
A) lower cost of ac4uirin# materials.&) achieve justintime supplier capability.
%) offer a complete product line.
D) e"pand product offerin#s.Answer: &
Diff:
$erms: process perspectiveObjective:
AA%&: 'eflective thin(in#
1>) hat is the primary purpose of the &alanced corecard7Answer: $he primary purpose of the &alanced corecard is to translate an or#ani*ation-s vision9
mission9 and strate#y into a set of performance measures that put that strate#y into action with
clearlystated objectives9 measures and tar#et.
Diff: $erms: balanced scorecard
Objective: AA%&: Analytical s(ills
/AL: $his 4uestion is not available in /yAccountin#Lab.
Objective
1) A properly constructed &alanced corecard tells the story of a business unit-s strate#y.
Answer: $'<!Diff: 1
$erms: balanced scorecard
Objective: AA%&: 'eflective thin(in#
) trate#y creates a competitive advanta#e by positionin# the company in its e"ternalenvironment where its internal resources and capabilities deliver somethin# to its customers
better than or different from its competitors.
Answer: $'<!
Diff: 1$erms: strate#y
Objective:
AA%&: 'eflective thin(in#
=
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A) Cision and mission statements set the #eneral direction for the or#ani*ation.
&) trate#y is a concise9 internallyfocused statement of how the or#ani*ation e"pects to competeand deliver value to customers.
%) /ission is a concise9 e"ternallyfocused statement that e"presses how the or#ani*ation wants
to be perceived by the e"ternal world.D) Cision is about selectin# the set of activities to create a sustainable difference in the
mar(etplace.
Answer: ADiff:
$erms: strate#y
Objective:
AA%&: 'eflective thin(in#
) $he purpose of the &alanced corecard is &!$ described as helpin# an or#ani*ation:
A) develop customer relations.
&) mobili*e employee s(ills for continuous improvements in processin# capabilities9 4uality9 andresponse times.
%) introduce innovative products and services desired by tar#et customers.D) translate an or#ani*ation-s mission9 vision9 and strate#y into a set of performance measures
that help to implement the strate#y.
Answer: DDiff:
$erms: balanced scorecard
Objective:
AA%&: 'eflective thin(in#
2) $he F0'$ step in developin# strate#ic objectives for the &alanced corecard is:
A) definin# the lon#run financial objectives.&) identifyin# the tar#et customer.
%) articulatin# the or#ani*ation-s vision.
D) select objectives for the customer value proposition.Answer: A
Diff:
$erms: strate#y9 objectives
Objective: AA%&: 'eflective thin(in#
>
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=) $o further Da(ota-s strate#y9 measures on the &alanced corecard would /O$ li(ely
include:A) shorter cycle times.
&) manufacturin# 4uality.
%) yield.
D) lowest cost supplier.Answer: &
Diff:
$erms: strate#yObjective:
AA%&: 'eflective thin(in#
plashdown %orporation manufactures water toys. 0t plans to #row by producin# hi#h4uality
water slides at a low cost that are delivered in a timely manner. $here are a number of other
manufacturers who produce similar water slides. plashdown believes that continuouslyimprovin# its manufacturin# processes and havin# satisfied employees are critical to
implementin# its strate#y.
>) plashdown-s value proposition is:A) product innovation and leadership.
&) complete customer solutions.
%) employees reco#ni*in# customer needs.D) lowest total cost.
Answer: D
Diff: $erms: value proposition
Objective:
AA%&: 'eflective thin(in#
?
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=) 0dentify the &!$ description of the &alanced corecard-s learnin# and #rowth perspective.
$o achieve our firm-s vision and strate#y:
A) Bow do we obtain a #reater mar(et share7&) hat do our noncustomers consider to be most important7
%) hat new processes do our customers value7
D) Bow do we identify the objectives for the people9 information technolo#y9 and or#ani*ationalali#nment that will drive improvement in the various process objectives7
Answer: D
Diff: $erms: learnin# and #rowth perspective
Objective:
AA%&: 'eflective thin(in#
>) $he returnoninvestment ratio is an e"ample of a &alanced corecard-s measure of the:
A) internal perspective.
&) customer perspective.
%) learnin# and #rowth perspective.D) financial perspective.
Answer: DDiff:
$erms: return on investment ratio9 financial perspective
Objective: AA%&: 'eflective thin(in#
?) $he number of customer complaints about a product is an e"ample of a &alanced corecard-s
measure of the:A) process perspective.
&) customer perspective.
%) learnin# and #rowth perspective.D) financial perspective.
Answer: &
Diff: $erms: customer perspective
Objective:
AA%&: 'eflective thin(in#
1@) /anufacturin# cycle efficiency is an e"ample of a &alanced corecard-s measure of the:
A) process perspective.&) customer perspective.
%) learnin# and #rowth perspective.
D) financial perspective.Answer: A
Diff:
$erms: process perspective
Objective: 1
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12) /ana#ers for the learnin# and #rowth perspective of the &alanced corecard must invest in
all of the followin# !+%!,$:
A) improve asset utili*ation.&) improvin# the s(ills of their employees.
%) enhancin# information technolo#y and systems.
D) ali#nin# employees to the company-s objectives.Answer: A
Diff:
$erms: learnin# and #rowth perspectiveObjective:
AA%&: 'eflective thin(in#
15) 6rapevine %orporation plans to #row by offerin# a cellular phone model9 the !'$8
$ouch creen9 which is superior and uni4ue from the competition. 6rapevine believes that
puttin# additional resources into 'ED and stayin# ahead of the competition with technolo#icalinnovations are critical to implementin# its strate#y.
Required:
a. 0s 6rapevine-s strate#y one of product innovation and leadership9 lowest total cost9 or completecustomer solutions7 &riefly e"plain.
0dentify at least one (ey element that you would e"pect to see included in the &alanced
corecard:
b. for the financial perspectiveG
c. for the customer perspectiveGd. for the process perspectiveG and
e. for the learnin# and #rowth perspective.
Answer: a. 6rapevine-s strate#y is one of product innovation and leadership because thecompany plans to offer a product that is superior and uni4ue from the competition.
$he company-s &alanced corecard should describe the product innovation and leadershipstrate#y. Hey elements should include:
b. operatin# income #rowth from char#in# hi#her prices for !'$8 $ouch creen for the
financial perspectiveGc. mar(et share in the cellular phone mar(et9 customer satisfaction9 and number of new
customers for the customer perspectiveG
d. manufacturin# 4uality9 new product features added9 and order delivery time for the process perspectiveG and
e. improvements in manufacturin# technolo#ies9 employee education and s(ill levels9 and
employee satisfaction for the learnin# and #rowth perspective.Diff:
$erms: balanced scorecard
Objective: 9 9
AA%&: Analytical s(ills12
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1=) ports Fanatic %orporation manufactures colle#e football banners. 0t plans to #row by
producin# hi#h4uality colle#e football banners at a low cost that are delivered in a timely
manner. $here are a number of other manufacturers who produce similar colle#e football banners. ports Fanatic believes that continuously improvin# its manufacturin# processes and
havin# satisfied employees are critical to implementin# its strate#y.
Required:a. 0s ports Fanatic-s strate#y one of product innovation and leadership9 lowest total cost9 or
complete customer solutions7 &riefly e"plain.
0dentify at least one (ey element that you would e"pect to see included in the &alanced
corecard:
b. for the financial perspectiveGc. for the customer perspectiveG
d. for the process perspectiveG and
e. for the learnin# and #rowth perspective.
Answer:a. ports Fanatic-s strate#y is one of lowest total cost because there are a number of other
manufacturers who produce similar colle#e banners. $o succeed9 ports Fanatic will have toachieve lower costs relative to competitors throu#h productivity and efficiency improvements9
elimination of waste9 and ti#ht cost controls.
$he company-s &alanced corecard should describe the lowest total cost strate#y. Hey elements
should include:
b. operatin# income #rowth from productivity #ains and revenue #rowth for the financial perspectiveG
c. #rowth in mar(et share9 new customers9 customer responsiveness9 and customer satisfaction
for the customer perspectiveGd. yield9 time to complete customer jobs9 and order delivery time for the process perspectiveG and
e. hours of employee trainin#9 and employee satisfaction for the learnin# and #rowth perspective.
Diff: $erms: balanced scorecard
Objective: 9 9
AA%&: Analytical s(ills
15
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1) Konprofit and #overnment or#ani*ations success must be measured by their effectiveness in providin# benefits to constituents.
Answer: $'<!
Diff: $erms: #overnment and nonprofit or#ani*ations
Objective: 5
AA%&: 'eflective thin(in#
) Outcomes9 rather than activities9 primarily drive the strate#y of nonprofit and #overnment
or#ani*ations.
Answer: $'<!Diff: 1
$erms: #overnment and nonprofit or#ani*ations9 strate#y
Objective: 5
AA%&: 'eflective thin(in#
) Konprofit and #overnment or#ani*ations #enerally place an objective related to their socialimpactand mission at the top of their scorecard and strate#y map.
Answer: $'<!
Diff: $erms: #overnment and nonprofit or#ani*ations9 strate#y9 objectives
Objective: 5
AA%&: 'eflective thin(in#
) Konprofit and #overnment or#ani*ations:
A) cannot use the &alanced corecard because they have no customers.&) cannot use the &alanced corecard because they have no financial objective.
%) may use the &alanced corecard by addin# a social impact perspective to the top of the
strate#y map.D) may use the &alanced corecard by not lin(in# it to mission and strate#y.
Answer: %
Diff:
$erms: balanced scorecard9 #overnment and nonprofit or#ani*ationsObjective: 5
AA%&: 'eflective thin(in#
1?
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2) uccess for nonprofit and #overnment or#ani*ations is measured primarily by:
A) their financial performance.
&) their effectiveness in providin# benefits to constituents.%) whether they can raise money.
D) whether they can balance their bud#ets.
Answer: &Diff:
$erms: #overnment and nonprofit or#ani*ations
Objective: 5AA%&: 'eflective thin(in#
5) $o effectively use the &alanced corecard9 nonprofit and #overnment or#ani*ations:
A) must identify a clear strate#y with outcomes identified.&) must focus on financial success as their primary objective.
%) must shift thin(in# from what it plans to accomplish to what it plans to do.
D) $hese or#ani*ations cannot effectively use the &alanced corecard.
Answer: ADiff:
$erms: strate#y9 #overnment and nonprofit or#ani*ationsObjective: 5
AA%&: 'eflective thin(in#
=) %ritical dimensions of the re#ulatory and social performance from the process perspective of
the &alanced corecard include all of the followin# !+%!,$:
A) community investment.
&) health and safety.%) the environment.
D) All of the above are correct.
Answer: DDiff:
$erms: balanced scorecard9 re#ulatory and social processes
Objective: 5AA%&: 'eflective thin(in#
>) Bow does a &alanced corecard for nonprofit and #overnment a#encies differ from a for profit scorecard7
Answer: $he or#ani*ation-s mission drives the nonprofit and #overnment a#ency-s &alanced
corecard9 whereas the financial perspective objectives drive the forprofit &alanced corecard.$he forprofit must satisfy customers9 while the nonprofit and #overnment a#ency must satisfy
funders and recipients.
Diff: $erms: balanced scorecard9 re#ulatory and social processes
Objective: 5
AA%&: Analytical s(ills
/AL: $his 4uestion is not available in /yAccountin#Lab.@
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1=) hat is the (ey in#redient to successful &alanced corecard implementation7 !"plain.
Answer: $he (ey in#redient to successful &alanced corecard implementation is to actively
involve senior mana#ement.Only senior mana#ement understands the strate#y of the whole or#ani*ation and is empowered to
ma(e the necessary decisions. $heir involvement also builds emotional commitment that is as
important as their (nowled#e and authority.Diff:
$erms: balanced scorecard9 strate#y
Objective: =AA%&: Analytical s(ills
/AL: $his 4uestion is not available in /yAccountin#Lab.
1>) hat is a (ey performance indicator scorecard and how does it differ from the &alancedcorecard7 hich is more effective7
Answer: $he &alanced corecard translates an or#ani*ation-s strate#y into a set of performance
measures that put that strate#y into action with clearlystated objectives9 whereas the (ey
performance indicator scorecard does not lin( the performance indicators to a strate#y. $he&alanced corecard is more effective because it lin(s to the performance measures to a