Question

A. Fixed costs should be included in a flexible budget even though they do not change when the level of activity changes.

True or False

B. A balanced scorecard should not contain any performance measures concerning customer satisfaction since the extent to which customers are satisfied is beyond the control of any manager in the company.

True or False ?

C. A balanced scorecard consists of an integrated set of performance measures that are derived from and support a company’s strategy.

True or False

Answer 1

Part A------- True

Fixed costs should be included in flexible budget even though they do not change when the level of activity changes.Fixed costs do not change, they remain the same like in static budget.

Part B------False

Balance Scorecard has 4 major performance measure -----Learning and growth, Innovation, Customer and Finance. Hence customer satisfaction performance measure is vital for any balance scorecard.

Part C----- True

A balance scorecard consists of integrated set of performance measures that are derived from and support company's strategy since it is a performance measurement tool which identifies the related business activities and outcomes of it. They support company's vision, mission , objectives and strategy and work in sync.