Chapter 23 - Answer - MANAGEMENT ACCOUNTING Solutions...

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MANAGEMENT ACCOUNTING - Solutions Manual CHAPTER 23 STRATEGIC COST MANAGEMENT;  BALANCED SCORECARD I. Questions 1. Strategy Weakness Cost leadership The tendency to cut costs in a way that undermines demand for the product or service. Differentiation The firm’s tendency to undermine its strength by attempting to lower costs or by lacking a continual and aggressive marketing plan to reinforce the perceived difference. Focus The market niche may suddenly disappear due to technological change in the industry or change in consumer tastes. 2. The balanced scorecard is an accounting report that includes the firm’s critical success factors in four areas: customer satisfaction, financial performance, internal business processes, and innovation and learning (human resources). The primary objective of the balanced scorecard is to serve as an action plan, a basis for implementing the strategy expressed in the critical success factors. 3. The balanced scorecard is important to integrate both financial and non- financial information into management reports. Financial measures reflect only a partial- and short-term measure of the firm’s progress. Without strategic non-financial information, the firm is likely to stray from its competitive course and to make strategically wrong product decisions – to choose the wrong products, the wrong customers. The balanced scorecard provides a basis for a more complete analysis than is possible with financial data alone. 4.
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This note was uploaded on 07/18/2011 for the course ECON 102 taught by Professor Sadassad during the Spring '11 term at Abant İzzet Baysal University.

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Chapter 23 - Answer - MANAGEMENT ACCOUNTING Solutions...

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