Which of the Following Is Not a Limitation of a Non-Financial

question 12

Multiple Choice

Which of the following is not a limitation of a non-financial measure?

• A) Managers find it difficult to select measures because there is a wide choice of non-financial measures.
• B) Managers find that some non-financial measures, such as customer satisfaction rating, lack integrity and are hard to verify.
• C) Non-financial measures are often too simplistic, such that managers find it hard to draw meaningful conclusions from examining non-financial measures.
• D) Non-financial measures do not always 'translate' to financial outcomes.

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Definitions:

Average Fixed Cost

The fixed cost divided by the quantity of output, representing the fixed cost per unit of output.

Total Fixed Costs

The sum of all costs that remain constant regardless of the level of production or output in a business.

Variable Costs

Costs that change in proportion to the good or service that a business produces.

Fixed Costs

Expenses that do not change with the amount of goods or services produced by a business.