Study Notes management accounting acca f2

Selecting measures:
Not only do appropriate measures have to be devised but the number of 
measures used must be agreed. Care must be taken that the impact of the results is not lost in a sea 
of information. 
▪ 
Expertise:
Measurement is only useful if it initiates appropriate action. Non-financial managers may 
have difficulty with the usual profit measures. With more measure to consider this problem will be 

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F2 Management Accounting
Page 119 of 147 
compounded. 
▪ 
Interpretation: 
Even a financially-trained manager may have difficulty in putting the figures into an 
overall perspective. 
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Application of Balance Scorecard for 
Electronic Circuits Inc. 

Financial success
Goals 
Measures (KPI) 
Survive 
Succeed 
Prosper 
Cash flows 
Quarterly sales growth in income by division 
Increased market share and ROCE. 

Customer satisfaction
Goals 
Measures (KPI) 
New products 
 
Preferred supplier 
Customer partnership 
Percentage of sales from new products. 
Percentage of sales from proprietary products. 
Share of key accounts purchased. 
Number of cooperative engineers efforts. 

Process efficiency
Goals 
Measures (KPI) 
Technology compatibility 
Manufacturing Excellence 
Design productivity 
New products introduced 
Manufacturing geometry vs. competitors 
Cycle time. 
Silicon and engineering efficiency 
Actual introduction schedule vs. planned 
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