1. Reasons for failure to implement the balanced scorecard effectively include all except which of the following?

Multiple Choice

• Measuring the results incorrectly.

• Failure to validate the assumptions in the strategy map.

• Setting the wrong performance targets.

• Failure to link nonfinancial measures to strategy.

• Failure to include SEC reporting responsibilities

2.

In a formal management control system, top management sets expectations for desired manager performance. Which of the following is not one of the areas in which a formal individual management control system would be used?

Multiple Choice

• Organizational culture.

• Sales.

• Promotion policies.

• Hiring practices.

• Operations.

3.

The most important objective of a strategic performance measurement system is:

Multiple Choice

• Motivation.

• Variances.

• Authority.

• Pricing.

• Budgeting.

4.

Lens Care Inc. (LCI) manufactures specialized equipment for polishing optical lenses. There are two models - one mainly used for fine eyewear (F-32) and another for lenses used in binoculars, cameras, and similar equipment (B-13). The manufacturing cost of each unit is calculated using activity-based costing, using the following manufacturing cost pools:

Cost Pools	Allocation Base	Costing Rate
Materials handling	Number of parts	$	2.40	per part
Manufacturing supervision	Hours of machine time	$	14.80	per hour
Assembly	Number of parts	$	3.30	per part
Machine setup	Each setup	$	56.50	per setup
Inspection and testing	Logged hours	$	45.50	per hour
Packaging	Logged hours	$	19.50	per hour

LCI currently sells the B-13 model for $1,775 and the F-32 model for $1,220. Manufacturing costs and activity usage for the two products are as follows:

	B-13				F-32
Direct materials	$	164.50			$	75.60
Number of parts		160				120
Machine hours		7.90				4.20
Inspection time		1.70				0.80
Packaging time		0.90				0.50
Setups		3.00				2.00

The market price for B-13 and F-32 are reduced to $1,695 and $1,095 respectively. To achieve the target cost, Lens Care plans to reduce materials handling costs. How many parts must be removed from F-32 in order to achieve the target cost for F-32 (round up to whole units)?

Multiple Choice

• 34

• 38

• 53

• 46

• 22

5.

Manders Manufacturing Corporation uses the following model to determine an optimal short-term product mix for its two products, metal (M) and scrap metal (S):

Max Z = $30M + $70S

Where: 3M + 2S 15

2M + 4S 18

The two inequality functions in the above set of items represent:

Multiple Choice

• Resource constraints.

• Objective function coefficients.

• Contribution margin functions.

• Sensitivity functions.

• Shadow points.