Which of the Following Statements About Performance Metrics Is False

question 21

Multiple Choice

Which of the following statements about performance metrics is false?

• A) Metrics should be linked to specific company objectives.
• B) You can never have too many metrics.
• C) Metrics must be synchronized with business realities.
• D) Metrics should be unambiguous.
• E) Metrics should involve a reasonable cost.

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Definitions:

Fixed Production Costs

Expenses that do not change with the level of production, such as rent for factory premises, salaries of permanent staff, and depreciation of machinery.

Inventory Cost

The total cost associated with acquiring, storing, and managing inventory, including purchase prices, storage costs, and shrinkage.

GAAP

Generally Accepted Accounting Principles; the common set of accounting principles, standards, and procedures that companies use to compile their financial statements in the US.

Cost Flow Assumption

An accounting principle that determines how costs are allocated and reported, including FIFO (First-In, First-Out), LIFO (Last-In, First-Out), and average cost methods.