BALANCED SCORECARD & GLOBAL CONTEMPORARY/EMERGING ISSUES IN MANAGEMENT ACCOUNTING

Question 1

1. The balanced scorecard has been adopted by many corporations. Which best describes the balanced scorecard?
   a. A strategy that meets management’s objectives.
   b. A diagram illustrating cause and effect relationships
   c. A table of key actions to achieve strategic objectives
   d. A strategic performance measurement and management framework

Answer 1

d. A strategic performance measurement and management framework

Question 2

2. A balanced scorecard is primarily concerned with
   a. Staff
   b. Strategy
   c. Systems
   d. Structure

Question 3

3. It is an operational factor that directly affects the economic viability of the organization.
   a. Key success factor
   b. Continuous improvement
   c. Customer focus
   d. Supply chain

Answer 3

a. Key success factor

Question 4

4. Strategy should focus PRIMARILY on the organization’s
   a. Products
   b. Customers
   c. Employees
   d. Shareholders

Answer 4

b. Customers

Question 5

5. To be successful, a company needs to be:
   a. Employee driven
   b. Customer driven
   c. Management driven
   d. “Driven” by the board of directors

Answer 5

b. Customer driven

Question 6

6. Which of the following is NOT a way for a company to improve customer response time?
   a. Use faster delivery procedures
   b. Produce the product more quickly
   c. Purchase material in larger quantities
   d. Increase capacity of bottleneck operations

Answer 6

c. Purchase material in larger quantities

Question 7

7. Which balanced scorecard performance measure is part of those used for internal business processes perspective?
   a. Cycle time
   b. Employee satisfaction {Learning & Growth}
   c. Customer retention {Customers}
   d. Return on investment {Financial}

Question 8

8. Which of the following is NOT an appropriate measure of internal business process performance?
   a. Quality costs
   b. Delivery cycle time
   c. Manufacturing cycle efficiency
   d. Number of customer complaints {Customers}

Answer 8

d. Number of customer complaints {Customers}

Question 9

9. Moscow Manufacturing Corporation has the following information:
   Moving time 8 days
   Processing time 10 days
   Inspection time 2 days Storage time 30 days
   What is the manufacturing cycle efficiency (MCE)?
   a. 20%
   b. 25%
   c. 60%
   d. 80%

Answer 9

a. 20%
Solution: MCE: value-added time ÷ throughput time (manufacturing cycle) = 10 ÷ (8+2+10+30)

Question 10

10. Productivity is measured by the
    a. Total quantity of input used to generate total quantity of output for a period
    b. Total quantity of output generated from a limited amount of input during a period
    c. Quantity of good output generated from a specific amount of input during a period
    d. Quantity of good output generated from the quantity of good input used during a period

Answer 10

c. Quantity of good output generated from a specific amount of input during a period

Question 11

11.The approaches and activities of managers in short-run and long-run planning and control decisions that increase value
for customers and lower costs of products and services are known as
a. Cost management
b. Value chain management
c. Enterprise resource planning
d. Customer value management

Answer 11

a. Cost management

Question 12

12. An Enterprise Resource Planning (ERP) system can best be described as:
    a. a collection of programs that use a variety of unconnected databases
    b. a sophisticated means of linking two or more companies to facilitate their planning processes
    c. a database that is primarily used by a purchasing department to determine the correct amount of a particular supply item to purchase
    d. a single database that collects data and feeds it into applications that support each of the company’s business activities, such as purchases, production, distribution, and sales

Answer 12

d. a single database that collects data and feeds it into applications that support each of the company’s business activities, such as purchases, production, distribution, and sales

Question 13

13. It is an approach to continuous improvement that focuses on serving customers and uses front-line workers to identify and solve problems systematically.
    a. ABC system
    b. Just-in-time (JIT) system
    c. Total quality management (TQM)
    d. Process value analysis

Answer 13

c. Total quality management (TQM)

Question 14

14. Total Quality Management (TQM) should be viewed as
    a. Goal centered and standard driven
    b. Policy centered and procedure driven
    c. Customer centered and employee driven
    d. Management centered and technology driven

Answer 14

c. Customer centered and employee driven

Question 15

15. Which of the following quality tools is another term for gradual yet continuous improvement?
    a. Theory of constraints
    b. Kaizen
    c. Business process reengineering
    d. Kanban system

Question 16

16. Business Process Reengineering (BPR) is a more radical approach to improvement than TQM since BPR
    a. Requires a change in the company’s products
    b. Involves completely redesigning business processes by outside consultants
    c. Involves redesigning business processes and eliminating value-added activities
    d. Empowers front-line workers to solve problems and it focuses on attention on solving problems rather
    than on finger-pointing

Question 17

17. Under Theory of Constraints (ToC), improvement efforts should be focused
    a. Work center that is a constraint
    b. Work center that has no constraint
    c. Cost center that incurs the highest costs
    d. Cost center that has least number of constraints

Answer 17

a. Work center that is a constraint

Question 18

18. A company that wants to be known as a world-class manufacturer of quality products shall spend more heavily on
    this type of quality costs.
    a. Appraisal costs
    b. Prevention costs
    c. Internal failure costs
    d. External failure costs

Question 19

19. Which of the four quality costs would be the MOST damaging to a company’s ability to build a reputation as a world-class manufacturer of quality products?
    a. Appraisal costs
    b. Prevention costs
    c. Internal failure costs
    d. External failure costs

Answer 19

d. External failure costs

Question 20

20. Following are items included in the quality cost report prepared for the last month:
    Employee training costs P 50,000
    Product testing P 20,000
    Equipment maintenance P 80,000
    Rework upon inspection P 25,000
    a. Appraisal cost is P 25,000
    b. Prevention cost is P 130,000
    c. External failure cost is P 20,000
    d. Internal failure cost is P 105,000