A Company Needs Performance Targets or Objectives

question 69

Multiple Choice

A company needs performance targets or objectives

• A)to help guide managers in deciding what strategic path to take in the event that a strategic inflection point is encountered.
• B)because they give the company clear-cut strategic intent.
• C)in order to unify the company's strategic vision and business model.
• D)for its operations as a whole and also for each of its separate businesses, product lines, functional departments, and individual work units.
• E)in order to prevent lower-level organizational units from establishing their own objectives.

---

Definitions:

FIFO Basis

Stands for "First In, First Out," an inventory valuation method where the costs of the earliest goods purchased or produced are the first to be recognized in determining cost of goods sold.

Perpetual Inventory System

A method where inventory quantities and cost of goods sold amounts are updated continuously as sales occur and purchases are made.

Lower-of-cost-or-market

An accounting principle that values inventory at the lower of its historical cost or current market price.

Average Cost

A method of inventory valuation that calculates the cost of goods sold and ending inventory based on the weighted average of all units purchased.