Chapter 24: Q10RQ (page 1355)
What are the goals of a performance evaluation system?
Promoting goal unity and coordination.
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What is a transfer price?
List the advantages of decentralization.
How is the use of a balanced scorecard as a performance evaluation system helpful to companies?
Consider the following key performance indicators, and classify each indicator according to the balanced scorecard perspective it addresses. Choose from the financial perspective, customer perspective, internal business perspective, and the learning and growth perspective.
a. Number of customer complaints
b. Number of information system upgrades completed
c. Residual income
d. New product development time
e. Employee turnover rate
f. Percentage of products with online help manuals
g. Customer retention
h. Percentage of compensation based on performance
i. Percentage of orders filled each week
j. Gross margin growth
k. Number of new patents
l. Employee satisfaction ratings
m. Manufacturing cycle time (average length of production process)
n. Earnings growth
o. Average machine setup time
p. Number of new customers
q. Employee promotion rate
r. Cash flow from operations
s. Customer satisfaction ratings
t. Machine downtime u. Finished products per day per employee
v. Percentage of employees with access to upgraded system
w. Wait time per order prior to start of production
Question: What is the purpose of a responsibility accounting system?
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