Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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Textbook Question
Chapter 13, Problem 15E
In a balanced scorecard, a key strategic if-then statement is provided: if the number of defective units decreases, then market share will increase. Assume that the targeted reduction level of defective units was achieved but that the targeted market share increase was not achieved. Which statement best describes this outcome?
- a. The company has not successfully implemented its strategic plan.
- b. Single-loop feedback is needed.
- c. The hypothesized relationship is somehow invalid.
- d. Corrective action must be taken so that the strategy can be executed as intended.
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Which of the following statements is true?
A balanced scorecard consists of a report showing a performance measure such as ROI or residual income for all of the divisions in a company that generate profits.
If a strategy is not working, it should become evident on the balanced scorecard when some of the predicted effects don’t occur.
In essence, a balanced scorecard lays out a theory of how the company can take concrete actions to attain its desired outcomes. The strategy should seem plausible, but it should be regarded as only a theory.
Which of the following statements about the balanced scorecard approach is false?
It requires managers to focus on financial measures more than nonfinancial measures.
It looks at performance from the following perspectives: financial, customer, internal business, and learning and growth.
It helps balance short-term operating performance with long-term strategies.
It recognizes that traditional measures of performance are often not adequate to fully assess a company’s performance.
Senior management is concerned that solely focus on ROI in measuring divisional performance could have an adverse long-run effect on Fairmont Publishing’s customers. What other measurement, if any, would you recommend Fairmont to use? Explain
Chapter 13 Solutions
Cornerstones of Cost Management (Cornerstones Series)
Ch. 13 - Describe a strategic-based responsibility...Ch. 13 - What is a Balanced Scorecard?Ch. 13 - What is meant by balanced measures?Ch. 13 - Prob. 4DQCh. 13 - Prob. 5DQCh. 13 - What are stretch targets? What is their strategic...Ch. 13 - Prob. 7DQCh. 13 - What are the three strategic themes of the...Ch. 13 - Prob. 9DQCh. 13 - Explain what is meant by the long wave and the...
Ch. 13 - Prob. 11DQCh. 13 - Prob. 12DQCh. 13 - What is a testable strategy?Ch. 13 - Prob. 14DQCh. 13 - Prob. 15DQCh. 13 - Norton Company has the following data for one of...Ch. 13 - Craig, Inc., has provided the following...Ch. 13 - Prob. 3CECh. 13 - The following comment was made by the CEO of a...Ch. 13 - Prob. 5ECh. 13 - Prob. 6ECh. 13 - Consider the following list of scorecard measures:...Ch. 13 - Hatch Manufacturing produces multiple machine...Ch. 13 - Computador has a manufacturing plant in Des Moines...Ch. 13 - Refer to Exercise 13.9. Assume that the company...Ch. 13 - The following if-then statements were taken from a...Ch. 13 - Consider the following quality improvement...Ch. 13 - Bannister Company, an electronics firm, buys...Ch. 13 - Prob. 14ECh. 13 - In a balanced scorecard, a key strategic if-then...Ch. 13 - Which of the following objectives would be...Ch. 13 - A manufacturing cell produces 40 units in five...Ch. 13 - Which of the following objectives would likely be...Ch. 13 - Which of the following objectives would likely be...Ch. 13 - Carson Wellington, president of Mallory Plastics,...Ch. 13 - At the end of 20x1, Mejorar Company implemented a...Ch. 13 - Refer to the data in Problem 13.21. 1. Express...Ch. 13 - The following strategic objectives have been...Ch. 13 - Lander Parts, Inc., produces various automobile...Ch. 13 - Auflegger, Inc., manufactures a product that...Ch. 13 - Prob. 26PCh. 13 - At the beginning of the last quarter of 20x1,...
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- Which of the following objectives would likely be associated with the customer perspective of the balanced scorecard? a. Increasing post-sales service efficiency b. Decreasing product development cycle time c. Reducing distribution channel cost d. Increasing delivery reliabilityarrow_forwardWhich of the following statements regarding the balanced scorecard is not correct? a. It seeks to address the problems associated with traditional financial measures used to assess performance. b. The notion of value chain analysis plays a major role in the drawing up of a balanced scorecard. c. It relies on the perception of the users with regard to service provided. d. It is directly derived from scientific management theories.arrow_forwardWithout proper performance measures, goal congruence is almost impossible to achieve and will likely lead to _______. A. more stable targets B. decreased defects C. lost profits D. employees satisfied with the status quoarrow_forward
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- Which of the following statement(s) is/are not true? i. Return On Investment (ROI) as a performance measure may discourage managers of divisions with high ROIs to invest in projects with lower ROIs that are acceptable to the organization as a whole. ii. ROI incorporates the firm’s opportunity cost of acquiring investment capital. iii. Under Residual Income (RI), rates of return can be adjusted to take into account differences in risks for different investment assets. iv. Both ROI and RI use a percentage measure. v. ROIs cannot be used to compare divisions of differing sizes. Multiple Choice a)i, ii and iii b)ii, iv and v c)i only d)i and ii e)ii, iii and ivarrow_forwardIn what way can the use of ROI as a performance measure for investment centers lead to bad decisions? What can be used to help overcome this problem?arrow_forwardWhich of the following should be used to compute the sales mix so that the break-even computation is meaningful to management in a multiproduct firm? A. The most desirable mix. B. The least desirable mix. C. The expected mix. D. The most profitable mix.arrow_forward
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