assignment_1,2,3
＿
1. Management accounting, as defined by the IMA, uses the expertise of the management
accountant to
improve quality and reduce manufacturing cost.
implement an organization's strategy.
improve business performance and the life cycle of operations.
implement a tactic of customer value and shareholder value.
Explanation：The correct answer is: implement an organization's strategy.
Management accounting, as defined by the Institute of Management Accountants (IMA), focuses on
providing information and analysis to support strategic decision-making and enhance an
organization's ability to achieve its goals. This includes aligning financial insights with strategic
objectives to improve overall performance and ensure long-term success.
Textbook explanation：This question requires an understanding of the definition of management
accounting, that is, management accounting “assists management in the formulation and
implementation of an organization’s strategy.” It also requires an understanding of the two types of
competitive strategy (from Michael Porter) – cost leadership and differentiation. Answer
(implement an organization's strategy.) is the only answer that fits the definition of management
accounting and of strategy.
＿
2. Cost management has evolved from a focus on measurement to one of identifying those measures
that are critical to the organization’s success. Given this new focus, indicate which one of the
following types of cost management systems cost managers are likely to be striving for.
Basic transaction reporting systems
A system that focuses on reliable financial reports
A system in which strategically relevant cost management information is an integral part
A system that tracks key operating data and develops accurate cost information
Explanation：The correct answer is: A system in which strategically relevant cost management
information is an integral part.
Modern cost management systems have evolved to focus on providing strategically relevant
information that aligns with the organization's goals and supports decision-making. This approach
goes beyond basic transaction reporting or solely ensuring accurate financial reports, aiming instead
to integrate critical cost and operational data that directly impact the organization's strategy and
success.
Textbook explanation：This exercise considers Robert Kaplan’s four-stage model of cost
management system development: 1) basic transactions, 2) focus on reliable external reporting, 3)
track key operating data for decision making, and 4) strategically relevant cost management
information is integral to the system. Stage 4, integral strategically relevant information, is the goal.
,＿
3.A company taking a strategic and customer-centered point of view can best address sustainability,
a concern for environmental and social as well as economic performance, through:
reporting violations of a company's human resources policy to the proper authorities.
the use of a sustainability perspective in the balanced scorecard.
annual financial reporting to the Securities and Exchange Commission.
lobbying in Congress for stronger environmental regulations.
Explanation：The correct answer is: the use of a sustainability perspective in the balanced
scorecard.
The balanced scorecard is a strategic management tool that helps organizations integrate and align
various performance metrics, including financial, customer, internal processes, and learning and
growth perspectives. By incorporating a sustainability perspective into the balanced scorecard,
companies can ensure that environmental, social, and economic performance is part of their
strategic objectives, addressing sustainability concerns while maintaining a customer-centered
focus.
Textbook explanation：The correct answer is (The use of a sustainability perspective in the
balanced scorecard). Most companies that report sustainability results have either a separate
sustainability scorecard or include sustainability as a perspective of the BSC. The SEC does not
permit or require sustainability reporting as part of the annual financial report. Reporting violations
of company human resource policy may have no effect on sustainability, and lobbying in Congress
may have important long term effect on sustainability, but taking action within the company
through the use of a sustainability scorecard can have immediate and significant effects within the
company.
＿
4.The implementation of the balanced scorecard (BSC) can involve all of the following except:
a strategy of differentiation (as opposed to one of cost leadership).
an accurate reflection of the organization’s strategy.
a link to reward and compensation systems.
the strong support of top management.
Explanation：The correct answer is: a strategy of differentiation (as opposed to one of cost
leadership).
The balanced scorecard (BSC) is a flexible strategic management tool that can be applied to any
organizational strategy, whether it is cost leadership or differentiation. It is not limited to
supporting one specific strategy over another. Instead, the BSC focuses on accurately reflecting the
organization’s chosen strategy, linking it to performance metrics, and gaining support from top
management, often including connections to reward and compensation systems.
Textbook explanation：The BSC is useful for both cost leader and differentiation companies, and is
implemented for both types of companies.
, ＿
Required:Using the four BSC perspectives: learning and growth, internal processes, customer
satisfaction, and financial, select these CSFs into the appropriate perspective. The following are
critical success factors for Dell Incorporated:
• Product manufacturing time: Internal Processes
• Customer perception of order-taking convenience and accuracy: Customer Satisfaction
• Revenue growth: Financial Perspective
• Selling expense to sales ratio: Financial Perspective
• Number of new manufacturing processes developed: Learning and Growth
• Order processing time: Internal Processes
• Materials inventory: Internal Processes
• Training dollars per employee: Learning and Growth
• Number of emerging technologies evaluated: Learning and Growth
• Customer retention: Customer Satisfaction
• Manufacturing defects: Internal Processes
• Number of new manufacturing processes under development: Learning and Growth
• Customer satisfaction with speed of service: Customer Satisfaction
• Gross margin: Financial Perspective
• Operating cost ratio: Financial Perspective
＿
1. Management accounting, as defined by the IMA, uses the expertise of the management
accountant to
improve quality and reduce manufacturing cost.
implement an organization's strategy.
improve business performance and the life cycle of operations.
implement a tactic of customer value and shareholder value.
Explanation：The correct answer is: implement an organization's strategy.
Management accounting, as defined by the Institute of Management Accountants (IMA), focuses on
providing information and analysis to support strategic decision-making and enhance an
organization's ability to achieve its goals. This includes aligning financial insights with strategic
objectives to improve overall performance and ensure long-term success.
Textbook explanation：This question requires an understanding of the definition of management
accounting, that is, management accounting “assists management in the formulation and
implementation of an organization’s strategy.” It also requires an understanding of the two types of
competitive strategy (from Michael Porter) – cost leadership and differentiation. Answer
(implement an organization's strategy.) is the only answer that fits the definition of management
accounting and of strategy.
＿
2. Cost management has evolved from a focus on measurement to one of identifying those measures
that are critical to the organization’s success. Given this new focus, indicate which one of the
following types of cost management systems cost managers are likely to be striving for.
Basic transaction reporting systems
A system that focuses on reliable financial reports
A system in which strategically relevant cost management information is an integral part
A system that tracks key operating data and develops accurate cost information
Explanation：The correct answer is: A system in which strategically relevant cost management
information is an integral part.
Modern cost management systems have evolved to focus on providing strategically relevant
information that aligns with the organization's goals and supports decision-making. This approach
goes beyond basic transaction reporting or solely ensuring accurate financial reports, aiming instead
to integrate critical cost and operational data that directly impact the organization's strategy and
success.
Textbook explanation：This exercise considers Robert Kaplan’s four-stage model of cost
management system development: 1) basic transactions, 2) focus on reliable external reporting, 3)
track key operating data for decision making, and 4) strategically relevant cost management
information is integral to the system. Stage 4, integral strategically relevant information, is the goal.
,＿
3.A company taking a strategic and customer-centered point of view can best address sustainability,
a concern for environmental and social as well as economic performance, through:
reporting violations of a company's human resources policy to the proper authorities.
the use of a sustainability perspective in the balanced scorecard.
annual financial reporting to the Securities and Exchange Commission.
lobbying in Congress for stronger environmental regulations.
Explanation：The correct answer is: the use of a sustainability perspective in the balanced
scorecard.
The balanced scorecard is a strategic management tool that helps organizations integrate and align
various performance metrics, including financial, customer, internal processes, and learning and
growth perspectives. By incorporating a sustainability perspective into the balanced scorecard,
companies can ensure that environmental, social, and economic performance is part of their
strategic objectives, addressing sustainability concerns while maintaining a customer-centered
focus.
Textbook explanation：The correct answer is (The use of a sustainability perspective in the
balanced scorecard). Most companies that report sustainability results have either a separate
sustainability scorecard or include sustainability as a perspective of the BSC. The SEC does not
permit or require sustainability reporting as part of the annual financial report. Reporting violations
of company human resource policy may have no effect on sustainability, and lobbying in Congress
may have important long term effect on sustainability, but taking action within the company
through the use of a sustainability scorecard can have immediate and significant effects within the
company.
＿
4.The implementation of the balanced scorecard (BSC) can involve all of the following except:
a strategy of differentiation (as opposed to one of cost leadership).
an accurate reflection of the organization’s strategy.
a link to reward and compensation systems.
the strong support of top management.
Explanation：The correct answer is: a strategy of differentiation (as opposed to one of cost
leadership).
The balanced scorecard (BSC) is a flexible strategic management tool that can be applied to any
organizational strategy, whether it is cost leadership or differentiation. It is not limited to
supporting one specific strategy over another. Instead, the BSC focuses on accurately reflecting the
organization’s chosen strategy, linking it to performance metrics, and gaining support from top
management, often including connections to reward and compensation systems.
Textbook explanation：The BSC is useful for both cost leader and differentiation companies, and is
implemented for both types of companies.
, ＿
Required:Using the four BSC perspectives: learning and growth, internal processes, customer
satisfaction, and financial, select these CSFs into the appropriate perspective. The following are
critical success factors for Dell Incorporated:
• Product manufacturing time: Internal Processes
• Customer perception of order-taking convenience and accuracy: Customer Satisfaction
• Revenue growth: Financial Perspective
• Selling expense to sales ratio: Financial Perspective
• Number of new manufacturing processes developed: Learning and Growth
• Order processing time: Internal Processes
• Materials inventory: Internal Processes
• Training dollars per employee: Learning and Growth
• Number of emerging technologies evaluated: Learning and Growth
• Customer retention: Customer Satisfaction
• Manufacturing defects: Internal Processes
• Number of new manufacturing processes under development: Learning and Growth
• Customer satisfaction with speed of service: Customer Satisfaction
• Gross margin: Financial Perspective
• Operating cost ratio: Financial Perspective
