Strategic Management Accounting Module 3 Quiz

Transcription

1 Questions Strategic Management ccounting Module 3 Quiz Here are some fairly easy questions to test you have understood the main points within this module. Question 1 Which of the following statements regarding performance measures and performance indicators is correct? Performance measures provide general information and are usually represented as trends. Performance indicators provide general information and are usually represented as trends. Performance measures are based on clearly defined information but not measured against a standard scale. Performance indicators are based on clearly defined information using measurements against a standard scale. Question 2 ollar sales per full-time-employee (FTE) is an example of a performance measure seen through which of the following dimensions? financial dimension qualitative dimension quantitative dimension non-financial dimension Question 3 Which of the following best describes 'sustainable performance'? Financial performance measurement focused on short-term profits. onsidering the environmental impacts when evaluating a project proposal. Performance measurement assessed over time and ideally improved over the long-term. Focusing on selling stock at a reduced price to achieve high levels of performance in one year. Page 1 of 8

2 Strategic Management ccounting Module 3 Quiz Question 4 The eyond udgeting approach is best explained by which of the following statements? Rewarding success based on achievement of fixed targets. Setting fixed targets rather than relative goals for continuous improvement. Making resources available as needed, not through annual budget allocations. reate controls based on variances against plans rather than on indicators or trends. Question 5 Which of the following best describes the limitations of financial performance measurement? The focus is on short-term performance and they are leading measures of performance. The focus is on short-term performance and they are lagging measures of performance. The focus is on long-term performance and they are leading measures of performance. The focus is on long-term performance and they are lagging measures of performance. Question 6 Which of the following best describes the strategy mapping process? Strategy mapping reflects the hierarchy of the relationship between performance measures. Strategy mapping balances the need for short-term performance with sustainable performance. Strategy mapping represents cascading performance measures from a corporate balanced scorecard to business units. Strategy mapping reflects the assumptions of the predictive model and identifies assumed cause-effect relationships. Page 2 of 8

3 Strategic Management ccounting Module 3 Quiz Question 7 s the management accountant at Fancy Felines pet food company you have been involved in constructing a corporate level alanced Scorecard. You have now been asked to use it to devise Key Performance Indicators for the production team. This is an example of which process? Integrating. ascading. Targeting. Implementing. Question 8 Which of the following is an example of an effectiveness performance measure? Number of hours of labour to produce a timber cabinet. ollar value of materials per timber cabinet produced. Number of timber cabinets produced and delivered on-time to customers. ollar value of capital expenditure on machinery to cut timber for timber cabinet production. Question 9 s the Strategic Management ccountant for MegaFans Pty Ltd a fan manufacturing company you have been asked to provide and compare sales revenues per employee for the factory in roome and the factory in ubbo. What type of benchmarking is being undertaken? Industry. External. Internal. Predictive. Page 3 of 8

4 Strategic Management ccounting Module 3 Quiz Question 10 Which of the following is not an example of an unintended or dysfunctional consequence from performance measurement? Gaming. ehaviour. Substitution. Tunnel vision. Page 4 of 8

5 Solutions Strategic Management ccounting Module 3 Quiz Question 1: orrect answer is Option Option Option Option This is incorrect because performance measures provide accurate information to a specified standard or scale, not general information. Performance indicators are usually represented as trends, although measures can also be represented to show trends or changes in the measure. This is correct because performance indicators do provide general information that approximates the quality being looked at and they are usually represented as trend information - due to their general nature. This is incorrect because performance measures are based on both clearly defined information and measured in standard units or against a standard scale. This is incorrect because performance indicators are approximations and are not based on clearly defined information, furthermore they are not measured against a standard scale. Question 2: orrect answer is Option Option Option Option This is incorrect because a performance measure in the financial dimension combines financial measures only such as earnings before interest and tax. ollar sales per FTE is a combination of financial and non-financial terms. This is incorrect because a performance measure in the qualitative dimension includes subjective judgements and opinions such as customer satisfaction levels. ollar sales per FTE is a combination of financial and non-financial terms. This is correct because dollar sales per FTE is a combination of financial and non-financial quantitative terms and is seen through the quantitative dimension. This is incorrect because a performance measure in the non-financial dimension does not include financial terms such as market share. ollar sales per FTE is a combination of financial and nonfinancial terms. Page 5 of 8

6 Strategic Management ccounting Module 3 Quiz Question 3: orrect answer is Option Option Option Option This is incorrect because sustainable performance should not focus on short-term profits but performance must be considered over time and be sustainable. This is incorrect because although sustainable performance means meeting the needs of today without compromising the ability of future generations to meet their own needs, it is much broader than just considering environmental impacts for a single project. This is correct because sustainable performance is considered over time and should at least sustain value, but ideally improve value over time. This is incorrect because sustainable performance means that performance must be considered over time and be sustainable, in this case the following year would be impacted by the significant price reductions to meet sales targets. Question 4: orrect answer is Option Option Option Option This is incorrect because the eyond udgeting approach rewards shared success based on relative performance, not on fixed targets. This is incorrect because the eyond udgeting approach sets relative goals for continuous improvement in place of fixed targets. This is correct because the eyond udgeting approach makes resources available as needed, rather than through annual budget allocations. This is incorrect because the eyond udgeting approach bases controls on relative indicators and trends, not based on variances against a plan. Question 5: orrect answer is Option Option Option Option This is incorrect because financial performance measures do focus on short-term performance but they are lagging rather than leading measures. This is correct because financial performance measures do focus on short-term performance and they are lagging rather than leading measures. This is incorrect because financial performance measures tend to focus on short-term performance rather than long-term performance and they are lagging rather than leading measures. This is incorrect because financial performance measures tend to focus on short-term performance rather than long-term performance and they are lagging rather than leading measures. Page 6 of 8

7 Strategic Management ccounting Module 3 Quiz Question 6: orrect answer is Option Option Option Option This is incorrect because the strategy mapping process reflects the assumptions of an organisations predictive model and is a visual approach to help identify assumed cause-effect relationships. This is incorrect because this is a benefit of the balanced scorecard, the strategy mapping process reflects the assumptions of an organisations predictive model and is a visual approach to help identify assumed cause-effect relationships. This is incorrect because the strategy mapping process reflects the assumptions of an organisations predictive model and is a visual approach to help identify assumed cause-effect relationships. This is correct because the strategy mapping process reflects the assumptions of an organisations predictive model and is a visual approach to help identify assumed cause-effect relationships. Question 7: orrect answer is Option Option Option Option This is incorrect because although you may be integrating the alanced Scorecard into the organisation the correct term is to 'cascade' measures down into business unit scorecards. This is correct because the corporate level alanced Scorecard is 'cascaded' down into business unit scorecards. This is incorrect because in some ways you may be targeting the KPIs to the lower level production team, the correct term is to 'cascade' measures down into business unit scorecards. This is incorrect because although this could be viewed as implementing the indicators in the alanced Scorecard, the correct term is to 'cascade' measures down into business unit scorecards. Question 8: orrect answer is Option Option Option Option This is incorrect because the number of hours of labour would be an activity type measure not an effectiveness measure. This is incorrect because the dollar value of materials would be an input type measure not an effectiveness measure. This is correct because effectiveness type measures measure outputs conforming to specified characteristics such as on-time deliver or meeting an agreed quality standard. This is incorrect because dollar value of capital expenditure would be an investment type measure not an effectiveness measure. Page 7 of 8

8 Strategic Management ccounting Module 3 Quiz Question 9: orrect answer is Option Option Option Option This is incorrect because industry benchmarking is comparisons between different organisations in an industry. This is an example of benchmarking between locations within one organisation. This is incorrect because this external benchmarking is comparisons between different organisations in an industry. This is an example of benchmarking between locations within one organisation. This is correct because this is an example of benchmarking between locations within one organisation and is therefore internal benchmarking. This is incorrect because predictive benchmarking is not a recognised type of benchmarking. Question 10: orrect answer is Option Option Option Option This is incorrect because gaming is an unintended or dysfunctional consequence from performance measurement. This is correct because behaviour in and of itself is not an example of an unintended or dysfunctional consequence from performance measurement, but sub-optimal behaviour is. This is incorrect because substitution is an unintended or dysfunctional consequence from performance measurement. This is incorrect because tunnel vision is an unintended or dysfunctional consequence from performance measurement. Page 8 of 8