When evaluating a company’s performance on the time dimension, managers should only

consider financial measures.” Do you agree? Explain.

No. Managers should use both financial and nonfinancial measures to manage the performance
of their firms along the time dimension. Financial measures, such as revenue and cost measures,
evaluate the financial effects of increases or decreases in measures such as customer-response
times. Nonfinancial measures help managers evaluate how well they have done on goals such as
improving manufacturing cycle times and customer-response times that drive financial
performance. Nonfinancial measures are leading indicators of financial performance. 

19-16 Rector Corporation is examining its quality control program. Which of the following
statements is/are correct?

I. Rework costs should be regarded as a cost of quality when the rework is caused by internal
failure. 
II. Prevention costs are costs that are incurred to prevent the sale and production of defective units. 
III.Internal failure costs are costs of failure of machinery on the production line.

1.    I, II, and III are correct. 2.    II only is correct.

3.   I and III only are correct. 4.    I only is correct.
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