Exam 13: The Balanced Scorecard: Strategic-Based Control

A manufacturing cell has the theoretical capability of producing 40,000 microchips per quarter. The conversion cost per quarter is $25,000. There are 4,000 production hours available within the cell per quarter. The theoretical cycle time per unit in minutes is

A competitive environment means that organizations will be

Delivery performance can be improved by

Performance expectations are communicated by setting

Barney's Town is a local clothing store in New York. Barney's Town has been experiencing increased competition from the national clothing chains. In an effort to improve performance, management intends to create a Balanced Scorecard. In a meeting, several measures were suggested by various managers. Management has identified a key problem. Customers are taking too long to pay their department store's charge card bills, and the company has an abnormal amount of bad debts. If this problem were solved, the company would have far more cash to invest in store improvements. Investigation has revealed that much of the problem with late payments and unpaid bills is apparently due to disputes about incorrect charges on the customer bills. Incorrect charges usually occur because sales clerks enter data incorrectly on the charge account slip. The performance measures suggested by the managers are given below: • Total sales revenue • Sales per square foot of floor space • Sales to inventory ratio • Sales per employee • Sales to total assets • Customer satisfaction with accuracy of charge account bills from monthly customer survey • Customer wait time for service • Travel expenses for buyers' trips • Average age of accounts receivable • Courtesy shown by junior staff members based on surveys of senior staff • Unsold inventory at the end of the season as a percentage of total cost of sales • Percentage of suppliers making just-in-time deliveries • Quality of food in the staff cafeteria based on staff surveys • Written-off accounts receivable as a percentage of sales • Percentage of charge account bills containing errors • Percentage of employees who have attended the city's cultural diversity workshop • Total profit • Profit per employee • Percentage of salesclerks trained to correctly enter data on charge account slips Required: a. Build an integrated Balanced Scorecard using only performance measures suggested by the managers. You do not have to use all the measures, but build a Balanced Scorecard that reveals a strategy for dealing with the problems with accounts receivable and unsold merchandise. b. Construct a testable strategy by showing the causal links (with arrows) between measures in the different perspectives, and show whether the performance measure should show an increase or decrease. c. Assume that the company adopts the Balanced Scorecard. After operating for a year, there are improvements in some performance measures but not in others. What should management do next?

The targets aimed at transforming the organization within a period of 3 to 5 years are called targets.

Outcome measures that are a result of past efforts are called measures.

Stretch targets are

The number of units that can be produced in a given period of time is called

Which of the following statements is true regarding lag measures?

Which of the following is not a strategic theme of the financial perspective?

Increasing customer value occurs when

Compare and contrast activity-based measures and strategic-based measures.

Which of the following is a perspective of strategic-based responsibility accounting but is NOT a perspective of activity-based responsibility accounting?

Business strategy is concerned with

In the customer perspective, objectives and measures that drive the creation of customer value are

At the beginning of 2016, Haroldson Company installed a JIT purchasing and manufacturing system. The following information has been gathered about one of the company's products. What is the ideal conversion cost per unit?

The outcome measures that are a result of past efforts are called:

The customer perspective defines the customer and market segments in which the business unit will compete.

For a firm to have balanced measures, the measures selected must be balanced between