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STRAT COST - CHAPTER 9 > Chapter 9 - Multiple Choice > Flashcards

Chapter 9 - Multiple Choice Flashcards

1
Q

Activity-based responsibility accounting adds which of the following to the financial-based responsibility accounting perspective?
a. consumer perspective
b. functional perspective
c. process perspective
d. learning perspective

A

c

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2
Q

A competitive environment means that organizations will be
a. producing increasingly high-volume, low-variety products and services.
b. focused internally on efficiency.
c. managing cause and effect linkages to customer satisfaction.
d. viewing their actions independent of competitors, suppliers, and customers.

A

c

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3
Q

Which of the following responsibility accounting systems translates the strategy of an organization into operational objectives and measures?
a. Financial-based responsibility accounting
b. Operational-based responsibility accounting
c. Activity-based responsibility accounting
d. Strategic-based responsibility accounting

A

d

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4
Q

Which of the following is NOT true about activity-based responsibility accounting?
a. The emphasis changes from cost reduction through change to cost control.
b. The emphasis includes financial results as well as how things are done.
c. Responsibility moves from one dimension to two dimensions.
d. It moves from a control system to a performance management system.

A

a

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5
Q

What are the two additional perspectives that are added to the activity-based approach to achieve strategic-based
responsibility?
a. a customer perspective and a learning and growth perspective
b. an infrastructure perspective and a process perspective
c. a customer perspective and a financial perspective
d. a financial perspective and a process perspective

A

a

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6
Q

Which of the following is true about a strategic-based responsibility accounting system?
a. It fails to connect with an organization’s overall mission and strategy.
b. It expands the number of responsibility dimensions from one to two.
c. It does not work for firms operating in dynamic environments.
d. It can take the form of a Balanced Scorecard.

A

d

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7
Q

Directed continuous improvement is accomplished by linking initiatives to
a. processes.
b. strategy and mission.
c. financial outcomes.
d. measures.

A

b

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8
Q

Which of the following is NOT an advantage of strategic-based responsibility accounting?
a. It includes perspectives that serve as a source of competitive advantage.
b. Responsibility is centralized within the organization.
c. Change efforts are directed by the mission and strategy.
d. All are advantages of strategic-based responsibility accounting.

A

b

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9
Q

Which of the following is a perspective of strategic-based responsibility accounting but is NOT a perspective of activity-based responsibility accounting?
a. financial perspective
b. process perspective
c. customer perspective
d. all of the above

A

c

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10
Q

The most common strategic-based performance management system is
a. variance analysis with standard costs as benchmarks.
b. the balanced scorecard.
c. financial budgets.
d. all of the above.

A

b

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11
Q

Which of the following is true of a Balanced Scorecard?
a. It fails to connect with an organization’s overall mission and strategy.
b. It is the most common form of an activity-based responsibility accounting system.
c. It does not work for firms operating in dynamic environments.
d. It is a strategic-based performance management system that identifies objectives and measures for four different perspectives.

A

d

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12
Q

Lead measures are critical to strategy because
a. they are based on actual activity.
b. they are an independent part of the system.
c. there should be a causal linkage with strategy.
d. they are outcome measures.

A

c

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13
Q

A major difference between activity-based responsibility accounting and strategic-based responsibility accounting is
a. only strategic-based responsibility accounting is linked to strategy.
b. only strategic-based responsibility accounting is focused on systemwide efficiency.
c. only strategic-based responsibility accounting includes the process perspective.
d. only strategic-based responsibility accounting reinforces team accountability.

A

a

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14
Q

Which feature is related solely to strategic-based responsibility and not to activity-based responsibility?
a. financial perspective
b. process perspective
c. team accountability
d. customer perspective

A

d

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15
Q

Which is a major difference between activity-based measures and strategic-based measures?
a. Strategic-based measures are linked to strategy.
b. Strategic-based measures are used to align objectives.
c. Strategic-based measures are balanced measures.
d. all of the above.

A

d

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16
Q

Which of the following statements is true regarding lag measures?
a. lag measures are measures that relate to customers
b. lag measures are factors that drive future performance
c. lag measures are performance drivers
d. lag measures include measures such as customer profitability

A

d

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17
Q

The outcome measures that are expressed in monetary terms are called:
a. Objective measures
b. External measures
c. Lag measures
d. Financial measures

A

d

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18
Q
  1. For a firm to have balanced measures, the measures selected must be balanced between
    a. lag and lead measures.
    b. objective and subjective measures.
    c. financial and nonfinancial measures.
    d. all of the above.
A

d

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19
Q

The outcome measures that are a result of past efforts are called:
a. Objective measures
b. External measures
c. Lag measures
d. Financial measures

A

c

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20
Q

The outcome measures that can be readily quantified and verified are called:
a. External measures
b. Objective measures
c. Financial measures
d. Lag measures

A

b

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21
Q

The outcome measures that relate to customers are called:
a. External measures
b. Objective measures
c. Financial measures
d. Lag measures

A

a

22
Q

Which of the following would be a nonfinancial measure?
a. customer profitability
b. dissatisfied customers
c. return on investment
d. cost per unit

A

b

23
Q

Which of the following would be an external measure?
a. return on investments
b. employee satisfaction
c. process efficiency
d. all of the above

A

a

24
Q

Which of the following would be a subjective measure?
a. employee capabilities
b. market share
c. return on investment
d. cost per unit

A

a

25
Q

Which of the following would NOT be an objective measure?
a. customer profitability
b. employee capabilities
c. return on investment
d. cost per unit

A

b

26
Q

Which of the following would be a lead measure?
a. customer profitability
b. cost per employee
c. return on investment
d. employee training hours

A

d

27
Q

Lead measures
a. are the measures with the highest priority.
b. are generic to different strategies.
c. are based on performance drivers.
d. represent the desired outcomes.

A

c

28
Q

Which of the following would be a lag measure?
a. budget forecasts
b. sales per employee
c. plant investment
d. employee training hours

A

b

29
Q

Which of the following features make stretch targets feasible?
a. The targets are set in isolation by top management.
b. The measures are linked by causal relationships.
c. The measures are based on currently attainable standard costs.
d. The targets are set at desired levels for twenty years to ensure long-term performance.

A

b

30
Q

Communicating strategy through measurements requires both scope and flexibility. Which of the following statements
is true?
a. Flexibility requires subjective and objective measurement as well as nonfinancial measures.
b. Flexibility requires that measures be optimal and dynamic.
c. Scope implies that internal and external measures are needed.
d. Both a and c are true.

A

d

31
Q

Which of the following statements comparing activity-based performance and strategic-based performance evaluation
is NOT true?
a. Strategic-based performance evaluation expands the set of metrics.
b. Only strategic-based performance evaluation leads to cost reductions.
c. Only strategic-based performance standards set stretch targets for all four perspectives.
d. Both systems encourage quality improvements.

A

b

32
Q

Stretch targets are
a. aimed at stretching the firm’s resources.
b. aimed at static standards.
c. aimed at transforming the organization within three to five years if achieved.
d. aimed at transforming the organization immediately.

A

c

33
Q

Which of the following is not a strategic theme of the financial perspective?
a. revenue growth
b. asset utilization
c. employee capability
d. risk management

A

c

34
Q

Business strategy is concerned with
a. choosing market and customer segments.
b. identifying critical internal and business processes.
c. selecting individual and organizational properties required.
d. all of the above.

A

d

35
Q

Strategy translation means:
a. choosing the market and customer segments a business unit intends to serve.
b. identifying the critical internal and business processes that a unit must excel at to deliver value propositions to
customers in the targeted market segments.
c. specifying objectives, measures, targets, and initiatives for the four responsibility dimensions: the financial
perspective, the customer perspective, the internal business process perspective, and the learning and growth
perspective.
d. selecting the individual and organizational capabilities required for internal, customer, and financial
objectives.

A

c

36
Q

Which of the following is NOT a step in developing the Balanced Scorecard?
a. setting balanced objectives
b. outlining control procedures
c. setting target values
d. rewards

A

b

37
Q

In the financial perspective, economic value added would be an appropriate measure for
a. revenue growth.
b. cost reduction.
c. improving asset utilization.
d. risk management.

A

c

38
Q

Objectives for increasing revenue growth include
a. adopting a new pricing strategy.
b. reducing the cost per unit.
c. eliminating non-value-added activities.
d. reducing distribution channel cost.

A

a

39
Q

Which of the following is NOT a measure commonly used to evaluate asset utilization?
a. return on investment
b. economic value added
c. market share
d. all of the above

A

c

40
Q
  1. Diversifying customers and product lines are initiatives important to
    a. revenue growth.
    b. cost reduction.
    c. asset utilization.
    d. risk management.
A

d

41
Q
  1. Diversifying customers and product lines are initiatives important to
    a. revenue growth.
    b. cost reduction.
    c. asset utilization.
    d. risk management.
A

d

42
Q

On-time delivery performance is calculated as
a. orders delivered on time/total number of orders delivered.
b. orders delivered on time/total sales dollars.
c. orders delivered on time/total production.
d. orders delivered/orders delivered on time.

A

a

43
Q

Increasing customer value occurs when
a. the customer receives more benefits.
b. the customer perceives a greater gap between benefits and sacrifice.
c. customer costs are reduced.
d. none of the above.

A

b

44
Q

In the Balanced Scorecard system, core objectives and measures
a. are common across all organizations.
b. are common across all scorecard perspectives.
c. are common across departments.
d. none of the above.

A

a

45
Q

From the customer perspective, which of the following might be considered a core objective rather than a performance value?
a. decrease price
b. increase customer retention
c. improve image
d. improve product quality

A

b

46
Q

From the customer perspective, which of the following might be an appropriate measure for improving product quality?
a. customer profitability
b. cost per customer
c. percentage of returns
d. number of patents pending

A

c

47
Q

An operational measure of quality is
a. defects per unit.
b. number of defective units.
c. pounds of scrap.
d. all of the above.

A

d

48
Q

The formula for computing Manufacturing Cycle Efficiency (MCE) is
a. Processing Time / (Processing time + Move time + Inspection time + Waiting time + Other non-value-added time).
b. Theoretical Capacity / Production hours available.
c. Cycle time per unit × velocity.
d. none of the above.

A

a

49
Q

The time it takes to produce one unit of product is called
a. velocity.
b. delivery time.
c. cycle time.
d. turnover.

A

c

50
Q

Cycle time is
a. the time it takes to collect the account after the sale.
b. the time it takes to turn inventory over.
c. the time it takes to deliver the product after it is sold.
d. the time it takes to produce one unit of product.

A

d

51
Q

The number of units that can be produced in a given period of time is called
a. turnover.
b. cycle time.
c. velocity.
d. efficiency.

A

c

52
Q

Delivery performance can be improved by
a. decreasing cycle time.
b. increasing cycle time.
c. decreasing velocity.
d. increasing turnover.

A

a

STRAT COST - CHAPTER 9 (3 decks)

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