5 - Strategic Management Accounting

Question 1

what is a balanced scorecard?

Answer 1

a strategic mgmt tool that integrates financial and non-financial performance measures in a single report

Question 2

what is the aim of a balanced scorecard?

Answer 2

communicating strategy of the company to the employees and to shift focus from profit maximization to value creation

Question 3

what is benchmarking?

Answer 3

measuring products and services against those of other best performing orgs

Question 4

what is business process reengineering?

Answer 4

examining business processes and making substantial changes to how the org operates and redesign of how work is done

Question 5

what is a cost of quality report?

Answer 5

indicates total cost to the org of producing p/s that do not conform with quality requirements

Question 6

what is just-in-time production?

Answer 6

producing products at the required quality and quantity at the precise time required

Question 7

what is kaizen costing?

Answer 7

making improvements to a process during manufacturing through small incremental amounts, rather than large innovations

Question 8

what is target costing?

Answer 8

focuses on managing cost through a product’s planning and design phase by establishing a target cost for the p/s that is derived from target selling price

Question 9

what is total quality mgmt?

Answer 9

customer-orientated process of continuous improvement that focuses on delivering p/s of consistent high quality in a timely manner

Question 10

processes for continuous improvement?

Answer 10

• bus process reengineering
• total quality mgmt
• kaizen costing

Question 11

what is PESTEL analysis used for?

Answer 11

to analyze how various external elements may impact their company

Question 12

what are the components SWOT analysis?

Answer 12

strengths
weaknesses
opportunities
threats

Question 13

what is the purpose of Porter’s 5 forces?

Answer 13

to determine the nature of competition in the industry

Question 14

what are the components of Porter’s 5 forces?

Answer 14

• threat of new entrants
• bargaining power of suppliers
• bargaining power of customers
• threat of substitute products
• degree of competitive rivalry

Question 15

what is the objective of benchmarking?

Answer 15

to find out how the process can be improved and ensure that the improvements are implemented

Question 16

what does business process reengineering focus on?

Answer 16

• simplification
• cost reduction
• improved quality
• enhanced customer satisfaction

Question 17

what is the diff between kaizen and target costing?

Answer 17

both focus on cost reduction. TC goes through the product design. KC goes through production processes and increased efficiency. TC has higher potential for cost reduction

Question 18

what changes result from JIT purchasing?

Answer 18

• smaller, more frequent purchase orders
• fewer supplies for each item
• less paperwork and inspection

Question 19

which two systems can be used for managing materials in manu companies?

Answer 19

• ERP

- JIT

Question 20

what is ERP?

Answer 20

• enterprise resource planning
• a system that considers first the amount and timing of goods demand, then determines the derived demand for resources (materials, components)

Question 21

what are the features of JIT production?

Answer 21

• production line focuses on actual customer demand
• minimizing setup time and lead-time
• production line is stopped if parts are absent/defective to create urgency about fixing issues

Question 22

what are the four areas of performance measured by the balanced scorecard?

Answer 22

1) financial perspective
2) customer perspective
3) internal business perspective
4) learning and growth perspective

Question 23

what is the purpose of strategy and strategic positioning?

Answer 23

finding the optimal mix of 3 strategies:

• cost leadership
• differentiation of products
• focusing on a niche in the market

Question 24

what does business process reengineering aim to improve?

Answer 24

the key business processes

Question 25

what happens in JIT production?

Answer 25

each component is produced immediately as needed by the next step in the production line

Question 26

what does ABM help with?

Answer 26

helps us see which activities use the most costs and then we reduce these activities to reduce cost