1.
Balanced Scorecard: The business performance measurement which concentrates on aligning the manager goals with the organization's goals is the balanced scorecard method.
This method considers different perspectives of multiple stakeholders which are; the business process perspective, customer perspective, financial perspective, and learning and growth perspective.
Contrast the previous manufacturing strategy and the new manufacturing strategy of the MPC.
2.
Balance Scorecard: The business performance measurement which concentrates on aligning the manager goals with the organization's goals is the balanced scorecard method.
This method considers different perspectives of multiple stakeholders which are; the business process perspective, customer perspective, financial perspective, and learning and growth perspective.
The reason for company changes its performance measurement system with the change in strategy. Also, provide examples of measures for the prior strategy and reason for those measures are not appropriate for the new strategy of the MPC.
3.
Balance Scorecard: The business performance measurement which concentrates on aligning the manager goals with the organization's goals is the balanced scorecard method.
This method considers different perspectives of multiple stakeholders which are the business process perspective, customer perspective, financial perspective, and learning and growth perspective.
A balanced scorecard.
4.
Balance Scorecard: The business performance measurement which concentrates on aligning the manager goals with the organization's goals is the balanced scorecard method.
This method considers different perspectives of multiple stakeholders which are; the business process perspective, customer perspective, financial perspective, and learning and growth perspective.
The hypotheses which are designed in the balanced scorecard, and also determine which of these hypotheses are most questionable.
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MANAGERIAL ACCOUNTING - CONNECT ACCESS E
- Suspicious Acquisition of Data, Ethical Issues Bill Lewis, manager of the Thomas Electronics Division, called a meeting with his controller, Brindon Peterson, and his marketing manager, Patty Fritz. The following is a transcript of the conversation that took place during the meeting: Bill: Brindon, the variable costing system that you developed has proved to be a big plus for our division. Our success in winning bids has increased, and as a result our revenues have increased by 25%. However, if we intend to meet this years profit targets, we are going to need something extraam I right, Patty? Patty: Absolutely. While we have been able to win more bids, we still are losing too many, particularly to our major competitor, Kilborn Electronics. If we knew more about their bidding strategy, we could be more successful at competing with them. Brindon: Would knowing their variable costs help? Patty: Certainly. It would give me their minimum price. With that knowledge, Im sure that we could find a way to beat them on several jobs, particularly on those jobs where we are at least as efficient. It would also help us to identify where we are not cost competitive. With this information, we might be able to find ways to increase our efficiency. Brindon: Well, I have good news. Ive been talking with Carl Penobscot, Kilborns assistant controller. Carl doesnt feel appreciated by Kilborn and wants to make a change. He could easily fit into our team here. Plus, Carl has been preparing for a job switch by quietly copying Kilborns accounting files and records. Hes already given me some data that reveal bids that Kilborn made on several jobs. If we can come to a satisfactory agreement with Carl, hell bring the rest of the information with him. Well easily be able to figure out Kilborns prospective bids and find ways to beat them. Besides, I could use another accountant on my staff. Bill, would you authorize my immediate hiring of Carl with a favorable compensation package? Bill: I know that you need more staff, Brindon, but is this the right thing to do? It sounds like Carl is stealing those files, and surely Kilborn considers this information confidential. I have real ethical and legal concerns about this. Why dont we meet with Laurie, our attorney, and determine any legal problems? Required: 1. Is Carls behavior ethical? What would Kilborn think? 2. Is Bill correct in supposing that there are ethical and/or legal problems involved with the hiring of Carl? (Reread the section on corporate codes of conduct in Chapter 1.) What would you do if you were Bill? Explain.arrow_forwardProblem 6-28 (Static) Companywide and Segment Break-Even Analysis [LO6-5] Piedmont Fasteners Corporation makes three different clothing fasteners in its manufacturing facility in North Carolina. All three products are sold in highly competitive markets, so the company is unable to raise prices without losing an unacceptable number of customers. Data from the most recent period concerning these products appear below: ok Annual sales volume Unit selling price ht Variable expense per unit nces Contribution margin per unit Velcro 100,000 Metal 200,000 Nylon 400,000 $ 1.65 $ 1.50 $ 0.85 $ 1.25 $ 0.70 $ 0.40 $ 0.80 $ 0.25 $ 0.60 Total fixed expenses are $400,000 per period. Of the total fixed expenses, $20,000 could be avoided if the Velcro product is dropped, $80,000 if the Metal product is dropped, and $60,000 if the Nylon product is dropped. The remaining fixed expenses of $240,000 consist of common fixed expenses such as administrative salaries and rent on the factory building that could…arrow_forwardY8 Triumph Automotive manufactures the rear-view mirrors that are used in cars. The newly appointed manager wants to cut the total cost of manufacturing by employing less-skilled labour to manufacture the product, which could affect the profit margin by 8%. However, this manufacturing approach has led to some issues and defects in assembling rear-view mirrors and as a result, Triumph Automotive has lost some of its customers. Senior management has intervened to examine this issue and explains to the manager about shifting the focus from profit maximisation to managing the financial and managerial resources for the well-being of the stakeholder and wider community. They also explain the orientation of interests of the managers and the shareholders of organisation in one direction, to achieve long-term goals without incurring any additional costs, such as agency costs. In this context: Required: Critically comment on the financial management objectives ‘profit-maximization’…arrow_forward
- Balanced Scorecard, Strategic Alignment Bannister Company, an electronics firm, buys circuit boards and manually inserts various electronic devices into the printed circuit board. Bannister sells its products to original equipment manufacturers. Profits for the last two years have been less than expected. Mandy Confer, owner of Bannister, was convinced that her firm needed to adopt a revenue growth and cost reduction strategy to increase overall profits. After a careful review of her firm's condition, Mandy realized that the main obstacle for increasing revenues and reducing costs was the high defect rate of her products (a 6 percent reject rate). She was certain that revenues would grow if the defect rate was reduced dramatically. Costs would also decline as there would be fewer rejects and less rework. By decreasing the defect rate, customer satisfaction would increase, causing, in turn, an increase in market share. Mandy also felt that the following actions were needed to help…arrow_forwardProblem 12-15 (Algo) Internal Business Process Performance Measures [LO12-3] Tombro Industries is in the process of automating one of its plants and developing a flexible manufacturing system. The company is finding it necessary to make many changes in operating procedures. Progress has been slow, particularly in trying to develop new performance measures for the factory. In an effort to evaluate performance and determine where improvements can be made, management has gathered the following data relating to activities over the last four months: Month 1 2 3 4 Quality control measures: Number of defects 203 181 142 97 Number of warranty claims 64 57 48 45 Number of customer complaints 120 114 97 76 Material control measures: Purchase order lead time 10 days 9 days 7 days 5 days Scrap as a percent of total cost 1 % 1 % 2 % 3 % Machine performance measures: Machine downtime as a…arrow_forwardProblem 12-15 (Algo) Internal Business Process Performance Measures [LO12-3] Tombro Industries is in the process of automating one of its plants and developing a flexible manufacturing system. The company is finding it necessary to make many changes in operating procedures. Progress has been slow, particularly in trying to develop new performance measures for the factory. In an effort to evaluate performance and determine where improvements can be made, management has gathered the following data relating to activities over the last four months: Month 1 2 3 4 Quality control measures: Number of defects 203 181 142 97 Number of warranty claims 64 57 48 45 Number of customer complaints 120 114 97 76 Material control measures: Purchase order lead time 10 days 9 days 7 days 5 days Scrap as a percent of total cost 1 % 1 % 2 % 3 % Machine performance measures: Machine downtime as a…arrow_forward
- Q2 Tool Industries manufactures large workbenches for industrial use. Sam Hartnet, the Vice President for marketing at Tool Industries, concluded from market analysis that sales were dwindling for Tool's workbenches due to aggressive pricing by competitors. Tool's workbench sells for $2,040 whereas the competition's comparable workbench sells for $1,780. Sam determined that a price drop to $1,780 would be necessary to protect its market share and maintain an annual sales level of 14,800 workbenches. Cost data based on sales of 14,800 workbenches: Budgeted Quantity Actual Quantity Actual Cost Direct materials (pounds) 184,000 177,000 $ 3,459,000 Direct labor (hours) 76,400 76,000 829,500 Machine setups (number of setups) 1,800 1,240 259,000 Mechanical assembly (machine hours) 33,600 285,750 3,768,000 The current cost per unit is (rounded to the nearest whole dollar): Multiple Choice $448. $390. $513. $562. $370.arrow_forwardExercise 10-9 (Algo) Return on Investment (ROI) and Residual Income Relations [LO10-1, LO10-2] A family friend has asked your help in analyzing the operations of three anonymous companies operating in the same service sector industry. Supply the missing data in the table below: (Loss amounts should be Indicated by a minus sign. Do not round your Intermediate calculations.) Sales Net operating income Average operating assets Return on investment (ROI) Minimum required rate of return: Percentage Dollar amount Residual income Company A Company B Company C $ 450,000 $ 650,000 $ 610,000 $ 44,000 $ 166,000 24 % $ 155,000 19 % % 13 % % 10 % $ 51,000 $ 7,000arrow_forwardBreakeven Planning; Profit Planning Connelly Inc., a manufacturer of quality electric ice creammakers, has experienced a steady growth in sales over the past few years. Because her business hasgrown, Jan DeJaney, the president, believes she needs an aggressive advertising campaign next yearto maintain the company’s growth. To prepare for the growth, the accountant prepared the followingdata for the current year:Variable costs per ice cream makerDirect labor $ 13.50Direct materials 14.50Variable overhead 6.00Total variable costs $ 34.00Fixed costsManufacturing $ 82,500Selling 42,000Administrative 356,000Total fixed costs $480,500Selling price per unit $ 67.00Expected sales (units) 30,000Required1. If the costs and sales price remain the same, what is the projected operating profit for the coming year?2. What is the breakeven point in units for the coming year? (Round your answer up to the nearest wholenumber.)3. Jan has set the sales target for 35,000 ice cream makers, which she thinks…arrow_forward
- control risk, inherent risk, detection risk, RMM? Explain why? IR/CR yes or no? RMM and DR increase,decrease or no effect? Factor IR Factor CR Factor Why? Comments Impact on RMM Impact on DR 1 Apollo advanced $1.25 million to Larry Lancaster’s secretary. 2 Apollo does not have adequate documentation supporting customer returns of product. 3 Apollo has maintained a positive trend in net income over the past several years, and has a strategic emphasis on meeting profitability targets. 4 Apollo has not allowed your firm to speak with the predecessor auditor about their withdrawal after last year’s engagement. 5 Apollo installed a new computer system mid-year.arrow_forwardBannister Company, an electronics firm, buys circuit boards and manually inserts various electronic devices into the printed circuit board. Bannister sells its products to original equipment manufacturers. Profits for the last two years have been less than expected. Mandy Confer, owner of Bannister, was convinced that her firm needed to adopt a revenue growth and cost reduction strategy to increase overall profits. After a careful review of her firms condition, Mandy realized that the main obstacle for increasing revenues and reducing costs was the high defect rate of her products (a 6 percent reject rate). She was certain that revenues would grow if the defect rate was reduced dramatically. Costs would also decline as there would be fewer rejects and less rework. By decreasing the defect rate, customer satisfaction would increase, causing, in turn, an increase in market share. Mandy also felt that the following actions were needed to help ensure the success of the revenue growth and cost reduction strategy: a. Improve the soldering capabilities by sending employees to an outside course. b. Redesign the insertion process to eliminate some of the common mistakes. c. Improve the procurement process by selecting suppliers that provide higher-quality circuit boards. Required: 1. State the revenue growth and cost reduction strategy using a series of cause-and-effect relationships expressed as if-then statements. 2. Illustrate the strategy using a strategy map. 3. Explain how the revenue growth strategy can be tested. In your explanation, discuss the role of lead and lag measures, targets, and double-loop feedback.arrow_forwardRefer to Exercise 10.7 for data. At the end of Year 2, the manager of the Houseware Division is concerned about the divisions performance. As a result, he is considering the opportunity to invest in two independent projects. The first is called the Espresso-Pro; it is an in-home espresso maker that can brew regular coffee as well as make espresso and latte drinks. While the market for espresso drinkers is small initially, he believes this market can grow, especially around gift-giving occasions. The second is the Mini-Prep appliance that can be used to do small chopping and dicing chores that do not require a full-sized food processor. Without the investments, the division expects that Year 2 data will remain unchanged. The expected operating incomes and the outlay required for each investment are as follows: Jarriots corporate headquarters has made available up to 500,000 of capital for this division. Any funds not invested by the division will be retained by headquarters and invested to earn the companys minimum required rate of return, 9 percent. Required: 1. Compute the ROI for each investment. 2. Compute the divisional ROI (rounded to four significant digits) for each of the following four alternatives: a. The Espresso-Pro is added. b. The Mini-Prep is added. c. Both investments are added. d. Neither investment is made; the status quo is maintained. Assuming that divisional managers are evaluated and rewarded on the basis of ROI performance, which alternative do you think the divisional manager will choose?arrow_forward
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