Many Companies Use a Balanced Scorecard for Performance Evaluation

question 96

Multiple Choice

Many companies use a balanced scorecard for performance evaluation. The balanced scorecard has four business perspectives, and utilizes KPIs to evaluate performance in various areas. Which of the following KPIs would relate to the financial perspective?

• A) Hours of employee training
• B) Number of warranty claims
• C) Percentage of market share
• D) Return on investment

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Definitions:

Overhead Variances

The difference between actual overhead costs and the budgeted or standard overhead costs.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to products or job orders, calculated before the costs are actually incurred.

Labor-Hour

A unit of measure representing one hour of work by an employee, often used in costing and budgeting processes.

Variable Overhead Efficiency Variance

The difference between the actual variable overhead incurred and the standard variable overhead allocated, based on the actual input of the allocation base.