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Examining How the Organization Looks to Shareholders Is Part of Which

question 57

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Examining how the organization looks to shareholders is part of which of the balanced scorecard perspectives?

Recognize the importance of selecting appropriate cost drivers in the allocation of costs.
Understand how indirect and direct costs are allocated within departments and across products.
Learn how to compute allocation of maintenance, advertising, and other indirect costs based on different bases such as square footage and sales values.
Differentiate between service, cost, and profit centers within an organization.

Definitions:

Diminishing Utility

A principle in economics that as consumption of a good or service increases, the marginal utility derived from each additional unit decreases.

Fed

Short for the Federal Reserve, which is the central banking system of the United States, responsible for monetary policy.

Externalities

Costs or benefits that affect parties who did not choose to incur that cost or benefit, often leading to market failure if unaddressed.

Moral Hazard

A situation in which one party engages in risky behavior or lacks incentive to guard against risk because another party bears the consequences.

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