Question

1.The signs that a manager is subject to motivated reasoning include all of the following except

a. the manager ignores bad news

b. the manage stops gathering information when results look good

c. the manager ignores good news

d. the manager relies too heavily on good news

2.

Which of the following statements regarding strategic objectives in the balanced scorecard is false?

a. Strategic objectives are the same as the overall mission statement of the company.

b. Each strategic objective is a subcomponent of the company's mission statement.

c. Strategic objectives define the purpose of an action taken within a company.

d. Each of the four performance perspectives in the balanced scorecard should be linked to at least one strategic objective.

3.

Yasmin Co. can further process Product B to produce Product C. Product B is currently selling for $34 per pound and costs $28 per pound to produce. Product C would sell for $57 per pound and would require an additional cost of $23 per pound to produce. The differential cost of producing Product C is

a. $23 per pound

b. $57 per pound

c. $28 per pound

d. $34 per pound

Answer 1

1) (b) the manager stops gathering information when results look good

MOTIVATED REASONING- It is a process of collecting proofs or evidences in order to support an existing notion or belief, that is, they act in a biased manner to arrive at a particular conclusion. Therefore, the correct answer is (b) because in this case, the manager has stopped gathering information.

2) (a) Strategic objectives are the same as the overall mission statement of the company.

STRATEGIC OBJECTIVES IN BALANCED SCORECARD- They are the long term goals that are to be achieved by an organization and are a sub part of the mission statement. Strategic Objectives are not the same as the Mission statement, as it includes many other components and covers a wider scope.

3) (a) $23 per pound

DIFFERENTIAL COST- It is the increase in Cost, because of the production of C. Thus, the additional cost that is required to further produce C, i.e. $23 per pound is the differential cost.