Question

QUESTION 1

1. Which of the following statements about the balanced scorecard approach is NOT true?

   		The four perspectives of the balanced scorecard revolve around measures of quality, productivity, efficiency and timeliness, and marketing success.
   		The balanced scorecard approach requires looking at performance from four different but related perspectives: financial, customer, internal business, and learning and growth.
   		The balanced scorecard approach integrates financial and non-financial performance measures.
   		the balanced scorecard helps to keep management focused solely on a company's financial factors.

1. For the current year, Winston Inc. reported sales of $800 000 and an asset turnover of 1.25 . The rate of return on average invested assets was 20 per cent. The company’s margin for the year was:

   		16 per cent
   		26 per cent
   		10 per cent
   		50 per cent

1. A company has computed that their ‘margin’ is 0.18. Which of the following statements is the best interpretation of these results?

   		Every $1 invested in assets generates $0.18 of segment margin.
   		$0.18 of every $1 invested in assets is net profit.
   		$0.18 of every $1 made in sales is profit.
   		Every $1 invested in assets generates $0.18 in sales revenue.

1. Which of the following is an example of an appraisal cost?

   		Costs to monitor existing environmental systems in the organisation
   		Public health costs
   		Cost of repair due to a firm's damage to the environment.
   		Fines for breach of environmental standards

Answer 1

Answer to 1 - Balance Score card - Balance score card a set of measures that gives Higher Management a Quick ( Bird's eye view ) as well as comprehensive view of Business. Balance Score card consist of Financial measure along with Operation measure on customer satisfaction , Internal Process Innovation and Improvement activities . Operational measures that will help us to develop future financial Model .

The complexity of managing an Organization in current scenario, require the manager to view performance in several area simultaneously .

After above short discussion about Balance Score Card , I believe following 2 sentence are not TRUE

1) The four perspectives of the balanced scorecard revolve around measures of quality, productivity, efficiency and timeliness, and marketing success. == In this sentence , major financial performance matter is completely not considered , which is Not correct

2) the balanced scorecard helps to keep management focused solely on a company's financial factors.== This is also not correct becuase , Balance score card is beyond Financial Factor . One of clause is Financial Factor ,which I mentioned as above

Answer to " Company Margin for the year

Detail calculation as below :

Sales - $800,000 Asset Turnover =1,25,ROA =20%

Asset Turnover Ratio = Net Sales / Avg Total Asset

1.25 = $800,000/ Avg Total Asset

Avg Total Asset = $ 640,000

Return on Asset ( ROA) = Return/ Avg Total Asset

Return = 20% * Avg Total Asset = $ 128000

Return Margin = $ 128,000/Sales = $ 128,000/ $ 800,000 = 16%

Q. A company has computed that their ‘margin’ is 0.18. Which of the following statements is the best interpretation of these results?

Answer - In general accounting terminology , Margin is mainly connected with Revenue .

I believe $0.18 of every $1 made in sales is profit= This is correct . We need to understand , every $1 made in Sales , how much Margin we can consider as margin ( Profit ) and Balance amount to be treated as cost . With help of this margin, We can Control cost as well as we can understand financial health of the company

Q Which of the following is an example of an appraisal cost?

Answer - Appraisal cost mainly relates to Company Quality Matter . Company incurred this cost in relates to Prevention and Protection of Goods before shipped it to Customer .

I believe , below one in correct relates to Appraisal cost

Costs to monitor existing environmental systems in the organisation