Deck 13: Strategy, Balanced Scorecard, and Profitability Analysis

Question 1

Wondergardens Ltd. operates amusement parks similar to those such as Six Flags, Universal Studios, Disneyland etc. Wondergardens' mission is to provide high quality family entertainment that exceed guests' expectations and will create lifelong memories. To achieve this goal, Wondergardens strives to provide safe, clean, friendly family environments at reasonable prices. In addition to the amusement parks, the company operates a community outreach program. Through volunteerism, it offers educational and recreational programs (e.g. after school programs for children and teenagers, employment related training for adults) and special events at its facilities.
Wondergardens' president, Roland Coaster, has asked you to lead a team of employees in developing a balanced scorecard for its parks.
Required:
For each balanced scorecard perspective identify two measures of performance that relate to Wondergardens' key success factors.

Answer 1

This is intended to be an open ended question and individual responses should be evaluated on their own merit. A good answer will identify relevant quantifiable performance measures and clearly link these to the mission. Some possible answers include:
Financial Perspective: Any traditional financial measures (such as stock price, profit margins, etc.) may be used since this is a corporation that needs to provide returns to its shareholders. Because the company has established "reasonable prices"
as part of its mission, it may measure its admission fees relative to its competitors.
Customer Perspective: Customer satisfaction would be of paramount importance. The company should survey its guests to include measures of satisfaction. Specifically it should question the customers about the cleanliness of its grounds, and its ranking of expectations (i.e. did your recent visit Meet, Exceed, Fall Below expectations?). Surveys would be tabulated and scored and a target set. (i.e. 75% "exceed"
rating). The company could also measure number of repeat customers which would suggest that customers enjoyed their experiences.
Internal Business Processes Perspective: Recommended measures might include number of new attractions, average wait time for attractions. New attractions would not only draw in customers but contribute to exceeding expectations and creating memories. Shorter wait times also directly link to customer satisfaction.
Learning & Growth: Since the company is involved in outreach activities, it may wish to measure the percentage of employees who volunteer in these programs. Percentage or number of employees trained is another measure that can be considered.

Question 2

Maloney Corporation manufactures plastic water bottles. It plans to grow by producing high-quality water bottles at a low cost that are delivered in a timely manner. There are a number of other manufacturers who produce similar water bottles. Maloney believes that continuously improving its manufacturing processes and having satisfied employees are critical to implementing its strategy.
Required:
a. Is Maloney's strategy one of product differentiation or cost leadership? Explain briefly.
b. Identify at least one key measure for each balanced scorecard perspective.

Answer 2

a. Maloney's strategy is one of cost leadership because there are a number of other manufacturers who produce similar water bottles. To succeed, Maloney will have to achieve lower costs relative to competitors through productivity and efficiency improvements, elimination of waste, and tight cost controls.
b. The company's balanced scorecard should describe the product differentiation strategy. Key elements should include:
Financial perspective: operating income growth from productivity gains and revenue growth from the ability to lower prices
Customer perspective: growth in market share, new customers, customer responsiveness, and customer satisfaction
Internal business process perspective: yield, time to complete customer jobs, order delivery time; cost per order;
Learning and growth perspective: employee education and skill levels, and employee satisfaction, investment in information technology

Question 3

Match each of the following balanced scorecard measures with the appropriate perspective.

-service response time

A) learning and growth perspective
B) customer perspective
C) financial perspective
D) internal business process perspective

Answer 3

internal business process perspective

Question 4

Match each of the following balanced scorecard measures with the appropriate perspective.

-market share

A) learning and growth perspective
B) customer perspective
C) financial perspective
D) internal business process perspective

Question 5

Match each of the following balanced scorecard measures with the appropriate perspective.

-gross margin percentage

A) learning and growth perspective
B) customer perspective
C) financial perspective
D) internal business process perspective

Question 6

Match each of the following balanced scorecard measures with the appropriate perspective.

-defect rates

A) learning and growth perspective
B) customer perspective
C) financial perspective
D) internal business process perspective

Question 7

Match each of the following balanced scorecard measures with the appropriate perspective.

-customer satisfaction

A) learning and growth perspective
B) customer perspective
C) financial perspective
D) internal business process perspective

Question 8

Match each of the following balanced scorecard measures with the appropriate perspective.

-information system availability

A) learning and growth perspective
B) customer perspective
C) financial perspective
D) internal business process perspective

Question 9

Match each of the following balanced scorecard measures with the appropriate perspective.

-new product development time

A) learning and growth perspective
B) customer perspective
C) financial perspective
D) internal business process perspective

Question 10

Match each of the following balanced scorecard measures with the appropriate perspective.

-return on investment

A) learning and growth perspective
B) customer perspective
C) financial perspective
D) internal business process perspective

Question 11

Match each of the following balanced scorecard measures with the appropriate perspective.

-employee training hours

A) learning and growth perspective
B) customer perspective
C) financial perspective
D) internal business process perspective

Question 12

Match each of the following balanced scorecard measures with the appropriate perspective.

-manufacturing cycle time

A) learning and growth perspective
B) customer perspective
C) financial perspective
D) internal business process perspective

Question 13

Use the information below to answer the following question(s).
Following a strategy of product differentiation, Luke Company makes a high-end Appliance, AP15. Luke Company presents the following data for the years 1 and 2.

Luke Company produces no defective units but it wants to reduce direct materials usage per unit of AP15 in year 2. Manufacturing conversion costs in each year depend on production capacity defined in terms of AP15 units that can be produced. Selling and customer-service costs depend on the number of customers that the customer and service functions are designed to support. Neither conversion costs or customer-service costs are affected by changes in actual volume. Luke Company has 46 customers in year 1 and 50 customers in year 2. The industry market size for high-end appliances increased 5% from year 1 to year 2.

-What is the Luke Company's operating income for year 1?

A) $4,000,000
B) $804,500
C) $1,240,000
D) $1,240,500
E) $1,440,000

Question 14

Use the information below to answer the following question(s).
Following a strategy of product differentiation, Luke Company makes a high-end Appliance, AP15. Luke Company presents the following data for the years 1 and 2.

Luke Company produces no defective units but it wants to reduce direct materials usage per unit of AP15 in year 2. Manufacturing conversion costs in each year depend on production capacity defined in terms of AP15 units that can be produced. Selling and customer-service costs depend on the number of customers that the customer and service functions are designed to support. Neither conversion costs or customer-service costs are affected by changes in actual volume. Luke Company has 46 customers in year 1 and 50 customers in year 2. The industry market size for high-end appliances increased 5% from year 1 to year 2.

-What is the Luke Company's operating income in Year 2?

A) $1,804,500
B) $1,440,000
C) $4,620,000
D) $200,000
E) $188,000

Question 15

Use the information below to answer the following question(s).
Following a strategy of product differentiation, Luke Company makes a high-end Appliance, AP15. Luke Company presents the following data for the years 1 and 2.

Luke Company produces no defective units but it wants to reduce direct materials usage per unit of AP15 in year 2. Manufacturing conversion costs in each year depend on production capacity defined in terms of AP15 units that can be produced. Selling and customer-service costs depend on the number of customers that the customer and service functions are designed to support. Neither conversion costs or customer-service costs are affected by changes in actual volume. Luke Company has 46 customers in year 1 and 50 customers in year 2. The industry market size for high-end appliances increased 5% from year 1 to year 2.

-What is the Luke Company's cost effect of growth component?

A) $60,000 unfavourable
B) $30,000 favourable
C) $60,000 favourable
D) $200,000 favourable
E) $30,000 unfavourable

Question 16

Use the information below to answer the following question(s).
Following a strategy of product differentiation, Barry Company makes an XX 300. Barry Company presents the following data for the years 1 and 2.

Barry Company produces no defective units but it wants to reduce direct materials usage per unit of XX 300 in year 2. Manufacturing conversion costs in each year depend on production capacity defined in terms of XX 300 units that can be produced. Selling and customer-service costs depend on the number of customers that the customer and service functions are designed to support. Neither conversion costs or customer-service costs are affected by changes in actual volume. Barry Company has 23 customers in year 1 and 25 customers in year 2. The industry market size for high-end appliances increased 5% from year 1 to year 2.

-What is the Barry Company's operating income for year 1?

A) $210,000
B) $366,120
C) $1,000,000
D) $260,000
E) $231,000

Question 17

Use the information below to answer the following question(s).
Following a strategy of product differentiation, Barry Company makes an XX 300. Barry Company presents the following data for the years 1 and 2.

Barry Company produces no defective units but it wants to reduce direct materials usage per unit of XX 300 in year 2. Manufacturing conversion costs in each year depend on production capacity defined in terms of XX 300 units that can be produced. Selling and customer-service costs depend on the number of customers that the customer and service functions are designed to support. Neither conversion costs or customer-service costs are affected by changes in actual volume. Barry Company has 23 customers in year 1 and 25 customers in year 2. The industry market size for high-end appliances increased 5% from year 1 to year 2.

-What is the Barry Company's operating income in year 2?

A) $378,600
B) $366,120
C) $1,242,000
D) $403,520
E) $210,000

Question 18

An analysis of Louis Brown Corporation's operating income changes between year 1 and year 2 show the following:
Operating income for Year 1 $1,000,000
Add growth component 30,000
Add price-recovery component 200,000
Deduct productivity component (10,000)
Operating income for Year 2 $1,220,000
Required:
Is Louis Brown's operating income gain consistent with the product differentiation or cost leadership strategy? Explain briefly.

Question 19

An analysis of Gardner Corporation's operating income changes between Year 1 and Year 2 show the
following:
Operating income for Year 1 $1,000,000
Add growth component 50,000
Deduct price-recovery component (30,000)
Add productivity component 120,000
Operating income for Year 2 $1,140,000
Required:
Is Gardner's operating income gain consistent with the product differentiation or cost leadership strategy? Explain briefly.

Question 20

Use the information below to answer the following question(s).
Following a strategy of product differentiation, Despotovich Corporation makes a high-end Computer Monitor, CM12. Despotovich Corporation presents the following data for the years 1 and 2:

Despotovich Corporation produces no defective units but it wants to reduce direct materials usage per unit of CM12 in Year 2. Manufacturing conversion costs in each year depend on production capacity defined in terms of CM12 units that can be produced. Selling and customer-service costs depend on the number of customers that the customer and service functions are designed to support. Neither conversion costs nor customer-service costs are affected by changes in actual volume. Despotovich Corporation has 46 customers in Year 1 and 50 customers in Year 2 . The industry market size for high-end computer monitors increased 5% from Year 1 to Year 2. Of the $40 increase in unit selling price, $10 was attributable to a general increase in prices.
-Required:
a. What is the operating income for Year 1?
b. What is the operating income in Year 2?
c. What is the change in operating income from Year 1 to Year 2?

Question 21

Use the information below to answer the following question(s).
Following a strategy of product differentiation, Despotovich Corporation makes a high-end Computer Monitor, CM12. Despotovich Corporation presents the following data for the years 1 and 2:

Despotovich Corporation produces no defective units but it wants to reduce direct materials usage per unit of CM12 in Year 2. Manufacturing conversion costs in each year depend on production capacity defined in terms of CM12 units that can be produced. Selling and customer-service costs depend on the number of customers that the customer and service functions are designed to support. Neither conversion costs nor customer-service costs are affected by changes in actual volume. Despotovich Corporation has 46 customers in Year 1 and 50 customers in Year 2 . The industry market size for high-end computer monitors increased 5% from Year 1 to Year 2. Of the $40 increase in unit selling price, $10 was attributable to a general increase in prices.
-Required:
a. What amount is the revenue effect of growth component?
b. What amount is the cost effect of growth component?
c. What is the change in operating income as a result of the growth component?

Question 22

Use the information below to answer the following question(s).
Following a strategy of product differentiation, Ernsting Ltd. makes high quality electronic components. Ernsting Ltd. presents the following data for the past two years relating to its XJ649 product.

Ernsting produces no defective units but it wants to reduce direct materials usage per unit in Year 2 . Manufacturing conversion costs in each year depend on production capacity defined in terms of units that can be produced. Selling and customer-service costs depend on the number of customers that the customer and service functions are designed to support. Neither conversion costs nor customer-service costs are affected by changes in actual volume. Ernsting has 60 customers in Year 1 and 66 customers in Year 2. The industry market size for the product increased 6% from Year 1 to Year 2. Of the $50 increase in unit selling price, $30 is attributable to a general price increase.
-Required:
a. What is the operating income for Year 1?
b. What is the operating income in Year 2?
c. What is the change in operating income from Year 1 to Year 2?

Question 23

Use the information below to answer the following question(s).
Following a strategy of product differentiation, Ernsting Ltd. makes high quality electronic components. Ernsting Ltd. presents the following data for the past two years relating to its XJ649 product.

Ernsting produces no defective units but it wants to reduce direct materials usage per unit in Year 2 . Manufacturing conversion costs in each year depend on production capacity defined in terms of units that can be produced. Selling and customer-service costs depend on the number of customers that the customer and service functions are designed to support. Neither conversion costs nor customer-service costs are affected by changes in actual volume. Ernsting has 60 customers in Year 1 and 66 customers in Year 2. The industry market size for the product increased 6% from Year 1 to Year 2. Of the $50 increase in unit selling price, $30 is attributable to a general price increase.
-Required:
a. What amount is the revenue effect of the growth component?
b. What amount is the cost effect of the growth component?
c. What is the net effect on operating income as a result of the growth component?

Question 24

Use the information below to answer the following question(s).
Following a strategy of product differentiation, Instruments Inc. makes a hand held calculator, II400. Instruments Inc. presents the following data for the years 1 and 2:

Instruments Inc. produces no defective units but it wants to reduce direct materials usage per unit of II400 in year 2. Manufacturing conversion costs in each year depend on production capacity defined in terms of II400 units that can be produced. Selling and customer-service costs depend on the number of customers that the customer and service functions are designed to support. Neither conversion costs or customer-service costs are affected by changes in actual volume. Instruments Inc. has 23 customers in year 1 and 25 customers in year 2. The industry market size for hand held calculators increased 5% from year 1 to year 2. Of the $4 increase in unit selling price, $1 is due to a general increase in prices.
-Required:
a. What is the operating income for Year 1?
b. What is the operating income in Year 2?
c. What is the change in operating income from Year 1 to Year 2?

Question 25

Use the information below to answer the following question(s).
Following a strategy of product differentiation, Instruments Inc. makes a hand held calculator, II400. Instruments Inc. presents the following data for the years 1 and 2:

Instruments Inc. produces no defective units but it wants to reduce direct materials usage per unit of II400 in year 2. Manufacturing conversion costs in each year depend on production capacity defined in terms of II400 units that can be produced. Selling and customer-service costs depend on the number of customers that the customer and service functions are designed to support. Neither conversion costs or customer-service costs are affected by changes in actual volume. Instruments Inc. has 23 customers in year 1 and 25 customers in year 2. The industry market size for hand held calculators increased 5% from year 1 to year 2. Of the $4 increase in unit selling price, $1 is due to a general increase in prices.
-Required:
a. What amount is the revenue effect of the growth component?
b. What amount is the cost effect of the growth component?
c. What is the net effect on operating income as a result of the growth component?

Question 26

Use the information below to answer the following question(s).
Following a strategy of product differentiation, Instruments Inc. makes a hand held calculator, II400. Instruments Inc. presents the following data for the years 1 and 2:

Instruments Inc. produces no defective units but it wants to reduce direct materials usage per unit of II400 in year 2. Manufacturing conversion costs in each year depend on production capacity defined in terms of II400 units that can be produced. Selling and customer-service costs depend on the number of customers that the customer and service functions are designed to support. Neither conversion costs or customer-service costs are affected by changes in actual volume. Instruments Inc. has 23 customers in year 1 and 25 customers in year 2. The industry market size for hand held calculators increased 5% from year 1 to year 2. Of the $4 increase in unit selling price, $1 is due to a general increase in prices.
-Required:
a. What is the net effect on operating income as a result of the productivity component?

Question 27

Use the information below to answer the following question(s).
Following a strategy of product differentiation, Electronics Inc. makes a hand held calculator, II300. Electronics Inc. presents the following data for the years 1 and 2:

Electronics Inc. produces no defective units but it wants to reduce direct materials usage per unit of II300 in year 2. Manufacturing conversion costs in each year depend on production capacity defined in terms of II300 units that can be produced. Selling and customer-service costs depend on the number of customers that the customer and service functions are designed to support. Neither conversion costs or customer-service costs are affected by changes in actual volume. Electronics Inc. has 23 customers in year 1 and 25 customers in year 2. The industry market size for hand held calculators increased 5% from year 1 to year 2. Of the $6 increase in unit selling price, $2 is due to a general increase in prices.
-Required:
a. What is the operating income for Year 1?
b. What is the operating income in Year 2?
c. What is the change in operating income from Year 1 to Year 2?

Question 28

Use the information below to answer the following question(s).
Following a strategy of product differentiation, Electronics Inc. makes a hand held calculator, II300. Electronics Inc. presents the following data for the years 1 and 2:

Electronics Inc. produces no defective units but it wants to reduce direct materials usage per unit of II300 in year 2. Manufacturing conversion costs in each year depend on production capacity defined in terms of II300 units that can be produced. Selling and customer-service costs depend on the number of customers that the customer and service functions are designed to support. Neither conversion costs or customer-service costs are affected by changes in actual volume. Electronics Inc. has 23 customers in year 1 and 25 customers in year 2. The industry market size for hand held calculators increased 5% from year 1 to year 2. Of the $6 increase in unit selling price, $2 is due to a general increase in prices.
-Required:
a. What amount is the revenue effect of the growth component?
b. What amount is the cost effect of the growth component?
c. What is the net effect on operating income as a result of the growth component?

Question 29

Use the information below to answer the following question(s).
Following a strategy of product differentiation, Electronics Inc. makes a hand held calculator, II300. Electronics Inc. presents the following data for the years 1 and 2:

Electronics Inc. produces no defective units but it wants to reduce direct materials usage per unit of II300 in year 2. Manufacturing conversion costs in each year depend on production capacity defined in terms of II300 units that can be produced. Selling and customer-service costs depend on the number of customers that the customer and service functions are designed to support. Neither conversion costs or customer-service costs are affected by changes in actual volume. Electronics Inc. has 23 customers in year 1 and 25 customers in year 2. The industry market size for hand held calculators increased 5% from year 1 to year 2. Of the $6 increase in unit selling price, $2 is due to a general increase in prices.
-Required:
a. What is the net effect on operating income as a result of the productivity component?

Question 30

Which of the following BEST describes the effect of uncertainty?

A) The higher the level of uncertainty about the relationship between resources used and outputs, the less likely a cause-and-effect relationship will exist.
B) The higher the level of uncertainty about the relationship between resources used and outputs, the more likely a cause-and-effect relationship will exist.
C) The higher the level of uncertainty about the relationship between resources used and outputs, the more likely the cost will classified as a discretionary cost.
D) The higher the level of uncertainty about the relationship between resources used and outputs, the less likely the cost will classified as a discretionary cost.
E) The higher the level of uncertainty about the relationship between resources used and outputs, the less likely a cause-and-effect relationship will exist, and the more likely the cost will classified as a discretionary cost.

Question 31

Analyze the results from specific productivity and capacity control strategies to achieve BSC expectations.

-Melik Company provided the following information:
What is the partial productivity ratio?

A) 0.32 units per kilogram
B) 0.42 units per kilogram
C) 2.40 units per kilogram
D) 3.16 units per kilogram
E) 0.80 units per kilogram

Question 32

Which of the following statements is TRUE concerning productivity measures?

A) Both the partial productivity and total factor productivity measures have the same weaknesses, but each has different strengths as a measure.
B) Both the partial productivity and total factor productivity measures have the same strengths, but each has different weaknesses as a measure.
C) Both the partial productivity and total factor productivity measures have the same strengths, and the same weaknesses as a measure.
D) The weaknesses of the partial productivity measure are the strengths of the total factor productivity measure.
E) The strengths and weakness in the measurements of the partial productivity measure are the strengths of the total factor productivity measures are completely unrelated to each other.

Question 33

Which of the following statements about productivity measures is TRUE?

A) They may only be stated in terms of dollars.
B) Total factor productivity explicitly considers gains from using fewer inputs, not from substituting inputs.
C) Partial productivity measures allow managers to evaluate the effect of input substitutions on overall productivity.
D) It is important to use the results as a starting point for analysis.
E) The productivity measure may not be made for companies with multiple products.

Question 34

Justine Ltd. provided the following information.

What is the partial productivity ratio?

A) 0.72 unit per kilogram
B) 0.75 units per kilogram
C) 1.34 units per kilogram
D) 1.12 units per kilogram
E) 0.78 units per kilogram

Question 35

Power Company has been unhappy with the financial accounting variances that its cost accounting system has been producing, because its managers believe that there is more to evaluating an operation than just examining accounting numbers. Therefore, it has started gathering data to assist in the examination of nonfinancial results of operations. The following information relates to the manufacture of remote control units for televisions, radios, and stereo components.
?
Required:
a. What is the partial productivity of direct materials for each year?
b. What is the partial productivity of direct manufacturing labour for each year?
c. Did each area improve between year 1 and year 2? Explain.
d. What will be the projected direct material and labour needs for year 3 if remote control units increase by 6,000 units, assuming Power Company applies the constant returns to scale technology?

Question 36

Electronics Inc. has been unhappy with the financial accounting variances that its cost accounting system has been producing, because its managers believe that there is more to evaluating an operation than just examining accounting numbers. Therefore, it has started gathering data to assist in the examination of nonfinancial results of operations. The following information relates to the manufacturing of remote control units for televisions, radios, and stereo components:

Required:
a. What is the partial productivity of direct materials for each year?
b. What is the partial productivity of direct manufacturing labour for each year?
c. Did each area improve between year 1 and year 2? Explain.
d. What will be the projected direct material and labour needs for year 3 if remote control units increase by 3,000 units, assuming Electronics, Inc. applies the constant returns to scale technology?

Question 37

Grader Company manufactures road graders. Because its managers all have engineering backgrounds, it prefers nonfinancial information for its decision-making models. Therefore, it requires that the accountants gather data to assist in the examination of nonfinancial results of operations. The following information relates to the manufacture of a mobile paver:

Required:
a. What is the partial productivity for direct materials for each year?
b. What is the partial productivity for direct manufacturing labour for each year?
c. What is the total factor productivity for each year?

Question 38

Lake Company manufactures small boats. Because its managers all have engineering backgrounds, they prefer nonfinancial information for their decision-making models. Therefore, they require the accountants gather data to assist in the examination of nonfinancial results of operations. The following information relates to the manufacture of a small boat.

Required:
a. What is the partial productivity for direct materials for each year?
b. What is the partial productivity for direct manufacturing labour for each year?
c. What is the total factor productivity for each year?

Question 39

Distance Company has been unhappy with the financial accounting variances that its cost accounting system has been producing, because its managers believe that there is more to evaluating an operation than just examining accounting numbers. Therefore, it has started gathering data to assist in the examination of nonfinancial results of operations. The following information relates to the manufacture of remote control units for televisions, radios, and stereo components:

Required:
a. What is the partial productivity of direct materials for each year?
b. What is the partial productivity of direct manufacturing labour for each year?
c. Did each area improve between Year 1 and Year 2? Explain.
d. What will be the projected direct material and labour needs for Year 3 if remote control units increase by 12,000 units, assuming Distance Company applies the constant returns to scale technology?

Question 40

Following a strategy of product differentiation, Sting Corporation makes a high-end computer monitor, CM7. Sting Corporation presents the following data for the years 2015 and 2016:

Sting Corporation wants to reduce direct materials usage per unit of CM7 in 2016. Manufacturing conversion costs in each year depend on production capacity defined in terms of CM7 units that can be produced. Selling and customer-service costs depend on the number of customers that the customer and service functions are designed to support. Sting Corporation has 100 customers in 2015 and 115 customers in 2016. The industry market size for high-end computer monitors increased 5% from 2015 to 2016.
Required:
a. Calculate the effect on the change of operating income as a result of the productivity component.
b. What is the partial productivity ratio for the direct materials for each year? (round to 4 decimal places) Give a plausible underlying reason for what may have caused the ratio to change.
c. What is the total factor productivity for 2016 and the total factor productivity benchmark based on input costs that would have been used in 2015 to produce 2016 output?(round to 4 decimal places)
d. Provide two key success factors, and a corresponding measure for each, that relate to Sting Corporation's internal business process balanced scorecard perspective.

Question 41

Ranger Electronics Ltd. manufactures a variety of high quality electronic components. Data from the last three months are presented below:
You are the new assistant controller for Ranger and the controller has asked you to review the performance over the last 3 months and write a summary analysis with your recommendations for follow up or further monitoring. In addition, the controller notes that the company, although it has many detailed performance measures, is considering implementing a balanced scorecard and asks you to identify the measures you think would be most appropriate to include in the balanced scorecard.
Required:
Evaluate the performance of Ranger Electronics over the 3 month period.

Question 42

Granger Electronics Ltd. manufactures a variety of high quality electronic components. Data from the last three months are presented below:
You are the new assistant controller for Granger and the controller has asked you to review the performance over the last 3 months and write a summary analysis with your recommendations for follow up or further monitoring. In addition, the controller notes that the company, although it has many detailed performance measures, is considering implementing a balanced scorecard and asks you to identify the measures you think would be most appropriate to include in the balanced scorecard.
Required:
Evaluate the performance of Granger Electronics over the 3 month period.

Question 43

Ralph Company has been very aggressive in developing various types of financial and nonfinancial measurement schemes to help with the evaluation of its manufacturing processes. It appears that some of the managers are suboptimizing in that their decision processes are geared solely for their department's benefit, sometimes to the detriment of the organization as a whole.
Required:
What changes in the evaluation system could the company implement to help minimize the suboptimization of the managers' decision-making process?