Test Bank for Horngren's Cost Accounting, 18th Edition by Datar (All Chapters Included)

The chapters in this document are displayed in reversed order, with the last chapter
appearing first. This change ensures all chapters are included in the test bank. Ch 1 to 24 ✅

Horngren's Cost Accounting, 18e (Datar/Rajan)
Chapter 24 Performance Measurement, Compensation, and Multinational
Considerations
Objective 24.1 Financial and Nonfinancial Performance Measures

1) A report that measures financial and nonfinancial performance measures for various organization units
in a single report is called a(n):
A) balanced scorecard
B) financial report scorecard
C) goal-congruence report
D) investment success report
Answer: A
Diff: 1
Objective: 1
AACSB: Analytical thinking

2) Customer-satisfaction measures are an example of the:
A) goal-congruence approach
B) balanced scorecard approach
C) financial report scorecard approach
D) investment success approach
Answer: B
Diff: 1
Objective: 1
AACSB: Analytical thinking

3) An example of a performance measure with a long-time horizon is:
A) direct materials efficiency variances
B) overhead spending variances
C) number of new patents developed
D) quality of room service
Answer: C
Diff: 2
Objective: 1
AACSB: Application of knowledge

4) Average number of repeat visits in a spa unit is a ________ measure on a balanced scorecard.
A) customer perspective
B) financial perspective
C) learning-and-growth perspective
D) internal-business-process perspective
Answer: A
Diff: 2
Objective: 1
AACSB: Application of knowledge




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,5) Which of the following steps in designing an accounting-based performance measure includes
decisions such as defining assets as total assets or net assets in the calculation of return on assets?
A) choosing performance measures that align with top management's financial goals
B) choosing the time horizon of each performance measure
C) choosing the details for each performance measure
D) choosing a target level of performance
Answer: C
Diff: 2
Objective: 1
AACSB: Analytical thinking

6) Which of the following steps in designing an accounting-based performance measure includes
decisions of selecting net income as a measure of financial performance?
A) choosing performance measures that align with the firm's financial goals
B) choosing the time horizon of each performance measure
C) choosing the details for each performance measure
D) choosing a target level of performance
Answer: A
Diff: 2
Objective: 1
AACSB: Analytical thinking

7) Which of the following is true about designing an accounting-based performance measure?
A) The decisions made in steps are followed in a hierarchical order.
B) The issues considered in each step are independent.
C) Management's beliefs are not required during the analyses.
D) Behavioral criteria are important when evaluating the steps.
Answer: D
Diff: 2
Objective: 1
AACSB: Analytical thinking

8) Which of the following activities would relate most closely to how often to report balance scorecard
results to top management?
A) developing the details of each performance measure
B) developing a feedback mechanism
C) aligning performance measures with financial goals
D) discovering appropriate internal business process perspectives
Answer: B
Diff: 2
Objective: 1
AACSB: Analytical thinking




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,9) Many common performance measures, such as customer satisfaction, rely on internal financial
accounting information.
Answer: FALSE
Explanation: Customer satisfaction would be obtained by surveys that are not in the financial
accounting records.
Diff: 1
Objective: 1
AACSB: Analytical thinking

10) Some companies present financial and nonfinancial performance measures for various organization
units in a single report called the balanced scorecard.
Answer: TRUE
Diff: 1
Objective: 1
AACSB: Analytical thinking

11) The balanced scorecard in most organizations is broken down into the following categories:
commercial perspective, supplier perspective, external business-process perspective, and productivity
perspective.
Answer: FALSE
Explanation: The balanced scorecard in most organizations is broken down into the following
categories: financial perspective, customer perspective, internal business-process perspective, and
learning-and-growth perspective.
Diff: 1
Objective: 1
AACSB: Analytical thinking

12) The first step in designing accounting based performance measures is to choose a target level of
performance and feedback mechanism.
Answer: FALSE
Explanation: The first step in designing accounting based performance measures is to choose
performance measures that align with top management's financial goals.
Diff: 1
Objective: 1
AACSB: Analytical thinking




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, 13) Assume you are evaluating a manufacturing company. Match the various organizational activities
and concepts with the performance measures listed. Some items may have more than one match.

Activities:
1. Change in revenues
2. Cycle time
3. Economic order quantity
4. Manufacturing defects
5. Market share
6. New products
7. On-time delivery
8. Operating income
9. Product reliability
10. Time-to-market

Performance measure:
________ a. Profitability

________ b. Customer satisfaction

________ c. Innovation

________ d. Efficiency, quality, and time
Answer:
1, 8 a. Profitability

5, 7, 9 b. Customer satisfaction

6, 10 c. Innovation

2, 3, 4, 7, 9, 10 d. Efficiency, quality, and time
Diff: 2
Objective: 1
AACSB: Application of knowledge




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