Many Companies Do Not Identify and Act on the Correct

question 15

Multiple Choice

Many companies do not identify and act on the correct non-financial measures.One mistake the companies make is _______ that involves not laying out the cause-and-effect relationships between drivers and strategic success.

• A) Not linking measures to strategy
• B) Not validating the links
• C) Not setting the right performance targets
• D) Measuring incorrectly
• E) Not creating a balanced scorecard

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Definitions:

Cost Behavior

Refers to the way different types of production costs change when there is a change in the level of production.

Special Order

A one-time order not considered part of the company's normal ongoing operations, often requiring special pricing and production considerations.

Variable Costs

Expenses that fluctuate directly with changes in production volume, such as raw materials and direct labor.

Capacity

The maximum level of output that a company can sustain to make a product or provide a service under normal conditions.