Survey of Accounting (Accounting I)
8th Edition
ISBN: 9781305961883
Author: Carl Warren
Publisher: Cengage Learning
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Chapter 14, Problem 14.5MBA
To determine
Concept Introduction:
Balance score card is an approach which provides information to management to assist strategic implementation. It emphasizes the need to provide the user with an information.
Economic value added is a value which is in excess of required
Brief analysis and comparison of balance scorecard and EVA.
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Creating Balanced Scorecard? that Support Different Strategies
The Midwest Consulting Group (MCG) helps companies build balanced scorecards. As part of its marketing efforts. MCG conducts an annual balanced scorecard workshop for prospective clients. As MCG’s newest employee, your boss has asked you to participate in this year’s workshop by explaining to attendees how a company’s strategy determines the measures that are appropriate for its balanced scorecard. Your boss has provided you with the excerpts below from the annual reports of two current MCG clients. She has asked you to use these excerpts in your portion of the workshop.
Excerpt from Applied Pharmaceuticals’ annual report:
The keys to our business are consistent and timely new product introductions and manufacturing process integrity. The new product introduction side of the equation is a function of research and development (R&D) yield (e.g., the number of marketable drug compounds created relative to the total number…
The Midwest Consulting Group (MCG) helps companies build balanced scorecards. As part of itsmarketing efforts, MCG conducts an annual balanced scorecard workshop for prospective clients. AsMCG’s newest employee, your boss has asked you to participate in this year’s workshop by explainingto attendees how a company’s strategy determines the measures that are appropriate for its balancedscorecard. Your boss has provided you with the excerpts below from the annual reports of two currentMCG clients. She has asked you to use these excerpts in your portion of the workshop.Excerpt from Applied Pharmaceuticals’ annual report:The keys to our business are consistent and timely new product introductions and manufacturingprocess integrity. The new product introduction side of the equation is a function of research andd evelopment (R&D) yield (e.g., the number of marketable drug compounds created relative to thetotal number of potential compounds pursued). We seek to optimize our R&D yield…
a) According to Kaplan and Norton, what characteristics/features make the balanced scorecard so special for its worldwide adoption?
b) Outline the five-pronged strategy crafted by Rockwater in developing the scorecard.
c) Using the balanced scorecard (tabular format), translate Rockwater’s strategy into tangible goals and actions.
d) Outline the importance of the balance score card to Rockwater’s.
e) What factors aided Rockwater in its smooth switch to the balanced Score card?
f) How beneficial can the scorecard be to Accra Business School?
Chapter 14 Solutions
Survey of Accounting (Accounting I)
Ch. 14 - When the manager has the responsibility and...Ch. 14 - The Accounts Payable Department has expenses of...Ch. 14 - Division A of Kern Co. has sales of $350,000, cost...Ch. 14 - Division L of Liddy Co. has a return on investment...Ch. 14 - Which approach to transfer pricing uses the price...Ch. 14 - Prob. 1CDQCh. 14 - Prob. 2CDQCh. 14 - Prob. 3CDQCh. 14 - Prob. 4CDQCh. 14 - Weyerhaeuser developed a system that assigns...
Ch. 14 - What is the major shortcoming of using operating...Ch. 14 - Prob. 7CDQCh. 14 - In a decentralized company in which the divisions...Ch. 14 - Prob. 9CDQCh. 14 - Prob. 10CDQCh. 14 - Prob. 11CDQCh. 14 - Prob. 12CDQCh. 14 - Why would standard cost be a more appropriate...Ch. 14 - Prob. 14CDQCh. 14 - Budget performance reports for cost centers...Ch. 14 - Divisional income statements The following data...Ch. 14 - Prob. 14.3ECh. 14 - Prob. 14.4ECh. 14 - Service department charges In divisional income...Ch. 14 - Service department charges and activity bases...Ch. 14 - Divisional income statements with service...Ch. 14 - Corrections to service department charges Panda...Ch. 14 - Profit center responsibility reporting On-Demand...Ch. 14 - Prob. 14.10ECh. 14 - Prob. 14.11ECh. 14 - Prob. 14.12ECh. 14 - Profit margin, investment turnover, and return on...Ch. 14 - Prob. 14.14ECh. 14 - Determining missing items in return on investment...Ch. 14 - Prob. 14.16ECh. 14 - Prob. 14.17ECh. 14 - Prob. 14.18ECh. 14 - Budget performance report for a cost center Sneed...Ch. 14 - Budget performance report for a cost center Sneed...Ch. 14 - Profit center responsibility reporting A-One...Ch. 14 - Profit center responsibility reporting A-One...Ch. 14 - Profit center responsibility reporting A-One...Ch. 14 - Prob. 14.3.1PCh. 14 - Divisional income statements and return on...Ch. 14 - Prob. 14.3.3PCh. 14 - Prob. 14.4.1PCh. 14 - Prob. 14.4.2PCh. 14 - Prob. 14.4.3PCh. 14 - Effect of proposals on divisional performance A...Ch. 14 - Prob. 14.4.5PCh. 14 - Prob. 14.5.1PCh. 14 - Prob. 14.5.2PCh. 14 - Prob. 14.5.3PCh. 14 - Prob. 14.5.4PCh. 14 - Prob. 14.6.1PCh. 14 - Prob. 14.6.2PCh. 14 - Prob. 14.6.3PCh. 14 - Prob. 14.6.4PCh. 14 - Prob. 14.6.5PCh. 14 - Balanced scorecard American Express Company (AXP)...Ch. 14 - Balanced scorecard Several years ago. United...Ch. 14 - Balanced scorecard Delta Air Lines, Inc. (DAL)...Ch. 14 - Balanced scorecard Costco Wholesale Corporation...Ch. 14 - Prob. 14.5MBACh. 14 - Prob. 14.1CCh. 14 - Prob. 14.2CCh. 14 - Prob. 14.3.1CCh. 14 - Prob. 14.3.2CCh. 14 - Prob. 14.3.3CCh. 14 - Prob. 14.3.4CCh. 14 - Prob. 14.4.1CCh. 14 - Prob. 14.4.2CCh. 14 - Prob. 14.4.3CCh. 14 - Prob. 14.4.4CCh. 14 - Prob. 14.5.1CCh. 14 - Prob. 14.5.2CCh. 14 - Prob. 14.5.3CCh. 14 - Prob. 14.5.4CCh. 14 - Prob. 14.5.5CCh. 14 - Prob. 14.5.6C
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- Eye Swear Inc. has a balanced scorecard that includes the following relationships: Actual results for this year and last year are as follows: Instructions 1.Analyze these statistics to verify whether they support the expected relationships between the strategic objectives and performance metrics. 2.Identify three possible reasons for any unsupported relationship you identified in part (1). 3.Which of the three possibilities you identified in part (2) is the most likely reason for the unsupported relationship you identified in part (1)?arrow_forwardClassify the performance measures below into the most likely balanced scorecard perspective itrelates to. Label your answers using C (customer), P (internal process), I (innovation and growth), or F(financial). Number of new products introducedarrow_forwardClassify the performance measures below into the most likely balanced scorecard perspective towhich it relates: customer (C), internal processes (P), innovation and growth (I), or financial (F). Customer complaintsarrow_forward
- The balanced scorecard approach a. evaluates performance using about 10 different perspectives in order to effectively incorporate all areas of the organization. b. uses rather vague, open statements when setting objectives in order to allow managers and employees flexibility. c. normally sets the financial objectives first, and then sets the objectives in the other perspectives to accomplish the financial objectives. d. uses only financial measures to evaluate performance.arrow_forwardInstructions 1. Label each element of the balanced scorecard. 2. Describe in words the relationships illustrated by the scorecards strategy map. 3. Describe in words the relationships illustrated by the scorecards measure map.arrow_forward(Appendix 11A) Which of the following is a perspective of the Balanced Scorecard? a. Learning and growth (infrastructure) b. Internal business process c. Customer d. Financial e. All of these.arrow_forward
- The following comment was made by the CEO of a company that recently implemented the Balanced Scorecard: Responsibility in a strategic-based performance management system differs on the three Ds: Direction, Dimension, and Diffusion. Required: Explain how this comment describes differences in responsibility between an activity-based and a strategic-based performance management system.arrow_forwardClassify each of the following performance measures into the balanced scorecard perspective to which it relates: financial perspective, internal operations perspective, learning and growth perspective, or customer perspective. A. Number of improved products B. Time from packaging to delivery or display C. Production costs D. Number of customer suggestions E. Sales mix revenues F. Number of repeat customersarrow_forwardInstructions 1.Based on the balanced scorecard and the following descriptions of the predicted relationships between strategic objectives, draw the scorecards strategy map. a.Training employees effectively and reducing employee turnover can both be expected to improve returns processing and reduce shipping errors. b.Both improving returns processing and reducing shipping errors can be expected to delight the customer. c.Delighting the customer can be expected to increase market share. 2.Based on the balanced scorecard and the following descriptions of the predicted relationships between performance metrics, draw the scorecards measure map. a.Median training hours per employee and average employee tenure will both influence hours from returned to refunded and number of erroneous shipments. b.Both hours from returned to refunded and number of erroneous shipments will affect percentage of customers who shop again and online customer satisfaction rating. c.Both percentage of customers who shop again and online customer satisfaction rating will influence the companys market share. 3.Label each element of the balanced scorecard.arrow_forward
- Prepare a balanced scorecard, without numbers, for Action Athletics that will help them to achieve their strategy and to maximize long-term shareholder value. (Give at least two performance measures for each category.)arrow_forwardRequirement 1: Please explain why a firm would use a balanced scorecard in evaluating divisional performance. Requirement 2: Please identify and define the four areas of the Balanced Scorecard. Select two areas and suggest how they might be used by Berkeley College.arrow_forwardClassify the performance measures below into the most likely balanced scorecard perspective itrelates to. Label your answers using C (customer), P (internal process), I (innovation and growth), or F(financial). Employee sustainability training sessions attendedarrow_forward
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