For operational control,a management accounting system should include:
A)Performance measures associated with basic business processes.
B)Only financial-control measures,such as standard cost variances.
C)High-level financial metrics such as return on investment (ROI)or return on sales (ROS).
D)A combination of short-term and strategic financial-performance metrics.

Question

Quizplus · Accepted Answer

Operational control involves managing and improving basic business processes. Therefore, performance measures associated with basic business processes are essential for effective operational control. Financial-control measures such as standard cost variances (B) and high-level financial metrics such as ROI or ROS (C) may not provide sufficient information for managing operational processes. However, a combination of short-term and strategic financial-performance metrics (D) can provide valuable insight into the effectiveness of operational processes as well as the overall financial health of the organization. Nevertheless, performance measures associated with basic business processes (A) are the most important for effective operational control.

For Operational Control,a Management Accounting System Should Include