Balanced Scorecard and Cost Analysis Review

School: Missouri State University, Springfield - Course: ACC 513 - Subject: Accounting

Exam 2 Review - Date of Exam is Thursday, March 10 Chapter 13: -Be familiar with the purpose of the balanced scorecard oBalanced scorecard:framework for implementing the organization's strategy that translates an organization's mission and strategy into a set of performance measures Focuses on achieving financial objectives, but it also highlights the nonfinancial objectives that an organization must achieve to meet and sustain its financial objectives. Balances the use of financial and nonfinancial performance measures to evaluate short and long run performance Measures an organizations performance from four perspectives: Financial: the profits and value created for shareholders Customer: the success of the company in its target market Internal business processes: the internal operations that create value for customers Learning and growth: the people and system capabilities that support the internal operations -Be able to calculate the revenue and cost effects of the growth component and the price- recovery component -Know conceptually what the growth component, the price-recovery component, and the productivity component measure oGrowth component:change in operating income attributable solely to the change in the quantity of output sold between one period and the next oPrice-recovery component:change in operating income attributable solely to changes in price of inputs and outputs between one period and the next oProductivity component:change in costs attributable to a change in the quantity of inputs in the current period relative to the quantity of inputs that would have been used in the prior period to produce the quantity of current period output. -Know the difference between the product differentiation and cost leadership strategies oProduct differentiation:organizations ability to offer products or services perceived by its customers to be superior and unique relative to the competitors oCost leadership:organization's ability to achieve lower costs relative to competitors through productivity and efficiency improvements, elimination of waste, and tight cost control

-Be able to calculate operating income for 2 consecutive years (as well as the change in operating income from one year to the next)