Financial And Managerial Accounting

15th Edition
WARREN + 1 other
ISBN: 9781337902663



Financial And Managerial Accounting

15th Edition
WARREN + 1 other
ISBN: 9781337902663
Textbook Problem

Eat-n-Run Inc. owns and operates 10 food trucks (mobile kitchens) throughout metropolitan Los Angeles. Each food truck has a different food theme, such as Irish-Mexican fusion, traditional Mexican street food, Ethiopian cuisine, and Lebanese-Italian fusion. The company was founded three years ago by Juanita O’Brien when she opened a single food truck with a unique menu. As her business has grown, she has become concerned about her ability to manage and control the business. O’Brien describes how the company was built, its key success factors, and its recent growth:

I built the company from the ground up. In the beginning, it was just me. I drove the truck, set the menu, bought the ingredients, prepared the meals, served the meals, cleaned the kitchen, and maintained the equipment. I made unique meals from quality ingredients and didn’t serve anything that wasn’t perfect. I changed my location daily and notified customers of my location via Twitter.

As my customer base grew, I hired employees to help me in the truck. Then one day I realized that I had a formula that could be expanded to multiple trucks. Before I knew it, I had 10 trucks and was hiring people to do everything that I used to do by myself. Now, I work with my team to build the menu, set daily locations for the trucks, and manage the operations of the business.

My business model is based on providing the highest-quality street food and charging more for it than other trucks. You won’t get the cheapest meal at one of my trucks, but you will get the best. The superior quality allows me to price my meals a little bit higher than the other trucks. My employees are critical to my success. I pay them a better wage than they could make on other food trucks, and I expect more from them. I rely on them to maintain the quality that I established when I opened my first truck.

Things are going great, but I’m feeling overwhelmed. So far, the growth in sales has led to a growth in profitability—but I’m getting nervous. If quality starts to fall off, my brand value erodes, and that could affect the prices that I charge for my meals and the success of my business.

Create balanced scorecard metrics for Eat-n-Run Inc. Identify whether these measures best fit the learning and growth, internal processes, customer, or financial performance perspective of the balanced scorecard.

To determine

Create balanced scorecard metrics and identify the performance perspective on the balanced scorecard for those measures.


Balanced Scorecard:

Balanced scorecard is a commonly used strategic performance measurement tool. The goals of the company are aligned with the metrics of measurement in the balanced scorecard enabling the management to analyze the performance of employees effectively.

Strategic Objectives:

Strategic objectives are the goals of the organization. They refer to those objectives which the organization aims at achieving in the given period or in a long run.

The performance metrics for customer perspective are:

  • Number of meals purchased.
  • Number of customer complaints...

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