Which of the Following Is Not Indicated as an Advantage

question 146

Multiple Choice

Which of the following is not indicated as an advantage of using nonfinancial performance measures, relative to financial performance measures, as part of an operational control system?

• A) Nonfinancial performance indicators are readily understandable by operating personnel.
• B) Nonfinancial performance indicators can be viewed as drivers of future financial performance.
• C) Nonfinancial performance indicators direct attention to precise problem areas that need attention.
• D) Nonfinancial performance measures are more reliable than financial performance measures.

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Definitions:

Incremental Costs

Incremental costs refer to the additional costs that a company incurs when increasing its production or activities by a small amount, also known as marginal costs.

Accumulated Depreciation

The total amount of depreciation expense recorded for an asset over its life.

Net Advantage

A term used in various contexts to indicate the superiority or benefit achieved by one option over another, often evaluated in decision-making scenarios.

Annual Operating Costs

The yearly expenses associated with running a business, excluding costs associated with the production of goods or services.