The Management Accountant Must Design Performance Measures to Evaluate and Control

question 18

Multiple Choice

The management accountant must design performance measures to evaluate and control JIT production.One of the dominant sources of information that the management accountant might use for this would be the personal observations of production line workers and team leaders.Another dominant source of information would be

• A)inventory turnover ratio.
• B)nonfinancial measures of time, inventory and quality.
• C)material cost variances.
• D)number of units sent to scrap/total scrap costs.
• E)total setup time for machines/total number of units started and completed.

---

Definitions:

Underlying Commodity

The basic physical asset upon which futures contracts and derivatives are based.

Maturity

The specified date on which the principal amount of a bond, loan, or other financial instrument is due to be repaid.

Preferred Dividends

Payments made to preferred stockholders before any dividends are distributed to common stockholders, typically fixed and paid at regular intervals.

Cumulative Preferred Stock

A type of preferred stock that accrues dividends if payments are missed, ensuring shareholders receive these dividends before common stockholders in the future.