Chapter 13—The Balanced Scorecard: Strategic-Based Control Key
1. Activity-based responsibility accounting focuses on processes and uses both operational and financial
measures.
2. Activity-based responsibility accounting employs dynamic standards and emphasizes and supports
continuous improvement.
3. A strategic-based responsibility accounting system transforms the strategy of a company into operational
objectives and measures.
4. The most common form of strategic-based responsibility accounting system is the worksheet.
5. In a strategic-based responsibility accounting system, stretch targets are established for individual
performance measures.
6. The balanced scorecard is a strategic-based performance management system that identifies four
perspectives.
7. Strategy translation means specifying objectives and percentage of revenues from sale of products.
8. The customer perspective defines the customer and market segments in which the business unit will
compete.
9. Customer value is the sum of realization and sacrifice what the customer gives up and receives.
10. Strategic information availability include processes with real-time feedback.
11. Performance measures are derived from a company’s vision, strategy, and objectives.
12. To link measures to a strategy, they must be derived from management and be balanced.
13. Double-loop feedback occurs when managers get information about the effectiveness and the validity of the
strategy.
14. The strategy map connects the balanced scorecard strategy with an organization’s administration.
15. A testable strategy is a set of linked objectives aimed at an overall goal.
16. In order for the balanced scorecard to succeed, the entire organization must be behind it.
17. Articulation of the balanced scorecard should not be made to individuals within the organization.
18. Incentives must be structured and resources allocated to support the strategy chosen.
19. Performance expectations must be established once objectives and measures have been executed and
advertised.
20. Compensation should be based on performance and paid based on percentage of objective achieved.
21. Outcome measures that are a result of past efforts are called __________ measures.
lag
22. Outcome measures that are expressed in monetary terms are called __________ measures.
23. Dissatisfied customers are an example of a __________ measure.
24. The targets aimed at transforming the organization within a period of 3 to 5 years are called __________
targets.
25. Choosing general goals, customer segment, and nature of a business are all concern of strategy __________
.
26. Setting balanced objectives, target values, and rewards are steps in developing the __________ .
27. Training hours is an example of a(n) __________ measure.
28. A set of linked objectives aimed at an overall goal is the definition of a __________ strategy.
29. For strategic alignment, incentive compensation should be based on __________ performance, compared to
target values.
30. In a balanced scorecard, performance expectations are communicated by setting __________ .
31. Activity-based responsibility accounting adds which of the following to the financial-based responsibility
accounting perspective?
32. A competitive environment means that organizations will be
33. Which type of responsibility accounting addresses directed continuous improvement in environments that
consist of competitive conditions and dynamic change?
34. Which of the following is NOT true about activity-based responsibility accounting?
35. What are the two additional perspectives that are added to the activity-based approach to achieve strategic-
based responsibility?
36. Which of the following is NOT a limitation of activity-based responsibility accounting?
37. Directed continuous improvement is accomplished by linking initiatives to
38. Which of the following is NOT an advantage of strategic-based responsibility accounting?
39. Which of the following is a perspective of strategic-based responsibility accounting but is NOT a
perspective of activity-based responsibility accounting?
40. The most common strategic-based performance management system is
41. The balanced scorecard
42. Lead measures are critical to strategy because
43. A major difference between activity-based responsibility accounting and strategic-based responsibility
accounting is
44. Which feature is related solely to strategic-based responsibility and not to activity-based responsibility?
45. Which is a major difference between activity-based measures and strategic-based measures?
46. Which of the following statements is true regarding lag measures?
47. The outcome measures that are expressed in monetary terms are called:
48. For a firm to have balanced measures, the measures selected must be balanced between
49. The outcome measures that are a result of past efforts are called:
50. The outcome measures that can be readily quantified and verified are called:
51. The outcome measures that relate to customers are called:
52. Which of the following would be a nonfinancial measure?
53. Which of the following would be an external measure?
54. Which of the following would be a subjective measure?
55. Which of the following would NOT be an objective measure?
56. Which of the following would be a lead measure?
57. Lead measures
58. Which of the following would be a lag measure?
59. Which of the following features make stretch targets feasible?
60. Communicating strategy through measurements requires both scope and flexibility. Which of the following
statements is true?
61. Which of the following statements comparing activity-based performance and strategic-based performance
evaluation is NOT true?
62. Stretch targets are
63. Which of the following is not a strategic theme of the financial perspective?
64. Business strategy is concerned with
65. Strategy translation is concerned with
66. Which of the following is NOT a step in developing the Balanced Scorecard?
67. In the financial perspective, economic value added would be an appropriate measure for
68. Objectives for increasing revenue growth include
69. Which of the following is NOT a measure commonly used to evaluate asset utilization?
70. Diversifying customers and product lines are initiatives important to
71. In the customer perspective, objectives and measures that drive the creation of customer value are
72. On-time delivery performance is calculated as
73. Increasing customer value occurs when
74. In the Balanced Scorecard system, core objectives and measures
75. From the customer perspective, which of the following might be considered a core objective rather than a
performance value?
76. From the customer perspective, which of the following might be an appropriate measure for improving
product quality?
77. An operational measure of quality is
78. The formula for computing Manufacturing Cycle Efficiency (MCE) is
79. The time it takes to produce one unit of product is called
80. Cycle time is
81. The number of units that can be produced in a given period of time is called
82. Delivery performance can be improved by
83. A manufacturing cell has the theoretical capability of producing 40,000 microchips per quarter. The
conversion cost per quarter is $25,000. There are 4,000 production hours available within the cell per quarter.
The theoretical velocity per hour is
84. Which of the following might be a measure of employee motivation, empowerment, and alignment?
85. Which of the following is NOT a major enabling factor of the learning and growth perspective?
86. At the beginning of 2014, Terrapin Company installed a JIT purchasing and manufacturing system. The
following information has been gathered about one of the company’s products:
Theoretical annual capacity
3,500
Actual production
1,800
Production hours available
700
Actual conversion cost per hour
$10
The theoretical velocity per hour is
87. At the beginning of 2014, Terrapin Company installed a JIT purchasing and manufacturing system. The
following information has been gathered about one of the company’s products:
Theoretical annual capacity
3,500
Actual production
1,800
Production hours available
700
Actual conversion cost per hour
$10
What is the ideal conversion cost per unit?
88. Homegrown, Inc., manufactures a product that experiences the following activities:
Processing (three departments)
60 hours
Moving (four moves)
15 hours
Waiting time
45 hours
Storage time (before delivery)
120 hours
The MCE for the product is
89. A manufacturing cell has the theoretical capability of producing 40,000 microchips per quarter. The
conversion cost per quarter is $25,000. There are 4,000 production hours available within the cell per quarter.
The theoretical cycle time per unit in minutes is
90. At the beginning of 2014, Haroldson Company installed a JIT purchasing and manufacturing system. The
following information has been gathered about one of the company’s products.
Theoretical annual capacity
9,000
Actual production
3,600
Production hours available
3,000
Actual cost per unit
$33
The theoretical velocity per hour is
91. At the beginning of 2014, Haroldson Company installed a JIT purchasing and manufacturing system. The
following information has been gathered about one of the company’s products.
Theoretical annual capacity
9,000
Actual production
3,600
Production hours available
3,000
Actual cost per unit
$33
What is the ideal conversion cost per unit?
92. Mobility, Inc., manufactures a product that experiences the following activities:
Processing (three departments)
Moving (four moves)
Waiting time
Storage time (before delivery)
The MCE for the product is