Financial & Managerial Accounting
14th Edition
ISBN: 9781337119207
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 22, Problem 22.3TIF
To determine
To write: A brief memorandum to the company president, providing suggestions on how to improve the company’s performance measurement system.
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Students have asked these similar questions
Reid Company would like to implement a balanced scorecard performance measurement system. Its senior management team has
assembled the measures shown below for possible inclusion in its scorecard.
Required:
For each measure, indicate by placing an X in the appropriate column whether it would most likely be classified in the learning and
growth, internal business process, customer, or financial category of the company's balanced scorecard.
Learning
&
Growth
Internal
Business
Process
Item
Customer
Financial
Ex. Employee absenteeism rate
X
1. Sales from new customers
2. Customer defection rate
3. Average fuel cost per sales dollar
4. Average number of workplace accidents per employee
5. Delivery cycle time
6. Average training hours per employee
7. Number of job applicants from under-represented groups
Percent of customers that strongly agree with the statement
8.
"Your employees treated me courteously."
9. Return on assets
Percent of customers that strongly agree with the statement
"Your…
Balanced scorecards use both financial and nonfinancial measures to evaluate employees.
The four categories of a balanced scorecard are financial perspective, internal business perspective, customer perspective, and learning and growth perspective.
Are the above statements True / False?
If the above statements are true then what are:
the financial perspective
the internal business perspective
the customer perspective
the learning and growth perspective
The senior management of ABC Corp. has proposed the following three performance measures for the company:
1. Net income as a percent of stockholders' equity
2. Revenue growth
3. Employee satisfaction
Management believes these three measures combine both financial and nonfinancial measures and, as such, are superior to using just financial measures. What advice would you give ABC Corp. for improving its performance measurement system?
Chapter 22 Solutions
Financial & Managerial Accounting
Ch. 22 - What are the basic objectives in the use of...Ch. 22 - What is meant by reporting by the principle of...Ch. 22 - Prob. 3DQCh. 22 - The materials cost variance report for Nickols...Ch. 22 - Prob. 5DQCh. 22 - Prob. 6DQCh. 22 - Prob. 7DQCh. 22 - A. Describe the two variances between the actual...Ch. 22 - If variances are recorded in the accounts at the...Ch. 22 - Briefly explain why firms might use non financial...
Ch. 22 - Direct materials variances Bellingham Company...Ch. 22 - Direct labor variances Bellingham (Company...Ch. 22 - Factory overhead controllable variance Bellingham...Ch. 22 - Factory overhead volume variance Bellingham...Ch. 22 - Standard cost journal entries Bellingham Company...Ch. 22 - Income statement with variances Prepare an income...Ch. 22 - Prob. 22.7BECh. 22 - Standard direct materials cost per unit Roanoke...Ch. 22 - Standard product cost Sana Rosa Furniture Company...Ch. 22 - Budget performance report Genie in a Bottle...Ch. 22 - Direct materials variances The following data...Ch. 22 - Direct materials variances Silicone Engine Inc....Ch. 22 - Standard direct materials cost per unit from...Ch. 22 - Standard product cost, direct materials variance...Ch. 22 - Direct labor variances The following data relate...Ch. 22 - Direct labor variances La Batre Bicycle Company...Ch. 22 - Direct labor variances Greeson Clothes Company...Ch. 22 - Direct labor variances for a service company...Ch. 22 - Direct materials and direct labor variances At the...Ch. 22 - Flexible overhead budget Leno Manufacturing...Ch. 22 - Flexible overhead budget Wiki Wiki Company has...Ch. 22 - Factory overhead cost variances The following data...Ch. 22 - Factory overhead cost variances Blumen Textiles...Ch. 22 - Factory overhead variance corrections The data...Ch. 22 - Factory overhead cost variance report Tannin...Ch. 22 - Recording standards in accounts Cioffi...Ch. 22 - Recording standards in accounts "The Assembly...Ch. 22 - Prob. 22.21EXCh. 22 - Nonfinancial performance measures Diamond Inc. is...Ch. 22 - Prob. 22.23EXCh. 22 - Direct materials and direct labor variance...Ch. 22 - Flexible budgeting and variance analysis I Love My...Ch. 22 - Direct materials, direct labor, and factory...Ch. 22 - Factory overhead cost variance report Tiger...Ch. 22 - Standards for nonmanufacturing expenses Code Head...Ch. 22 - Direct materials and direct labor variance...Ch. 22 - Flexible budgeting and variance analysis I'm...Ch. 22 - Direct materials, direct labor, and factory...Ch. 22 - Factory overhead cost variance report Feeling...Ch. 22 - Prob. 22.5BPRCh. 22 - Genuine Spice Inc. began operations on January 1...Ch. 22 - Admissions time variance Valley Hospital began...Ch. 22 - United States Postal Service: Mail sorting time...Ch. 22 - Direct labor time variance Maywood City Police...Ch. 22 - Ethics in Action Dash Riprock is a cost analyst...Ch. 22 - Prob. 22.3TIF
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- As manager of department B in MarIeys Manufacturing, based on the costs you identified in the previous exercise for further research, how does this impact the financial performance of your department, and what might be some questions you want to ask or solutions you might propose to Marleys management?arrow_forwardThe primary reason for using a performance measure, such as ROI, is to: 10 Multiple Choice Ask Motivate organizatlons to embrace strategic plans that are consistent with employee goals. Motivate employees to hold stock In the company for long-term perlods. Motivate the CEO and CFO to maintaln their stock holdings In the company. Motivate employees to make decisions consistent with goals and objectives of the organization.arrow_forwardReid Company would like to Implement a balanced scorecard performance measurement system. Its senior management team has assembled the measures shown below for possible Inclusion in its scorecard. Requlred: For each measure, Indicate by placing an X In the appropriate column whether It would most likely be classified In the learning and growth, Internal business process, customer, or financlal category of the company's balanced scorecard. Learning & Internal Business Process Item Growth Customer Financial Ex. Employee absenteeism rate X 1. Sales from new customers 2. Customer defection rate 3. Average fuel cost per sales dollar 4. Average number of workplace accidents per employee 5. Delivery cycle time 6. Average training hours per employee 7. Number of job applicants from under-represented groups Percent of customers that strongly agree with the statement 8. "Your employees treated me courteously." 9. Return on assets Percent of customers that strongly agree with the statement "Your…arrow_forward
- Please answer ASAP.Financial performance measures are essential tools used by managers to evaluate the financialhealth of their organization. They provide an overview of the company's financialperformance, help identify areas of improvement, and support decision making.CarniTrin is a manufacturer of Carnival costumes in a highly competitive market. Thecompany's management team is seeking guidance on the use of financial performancemeasures to identify the key drivers of the company's financial performance and develop astrategy to improve it.The following data relate to the company for the year 2019: In its clothing division, the company has $4,000,000 invested in assets. After-taxoperating income from sales of clothing in 2019 is $700,000. Income for the clothingdivision has grown steadily over the last few years. The cosmetics division has $12,000,000 invested in assets and an after-tax operatingincome in 2019 of $1,700,000. The weighted-average cost of capital for CarniTrin is 10%…arrow_forwardFinancial performance measures are essential tools used by managers to evaluate the financial health of their organization. They provide an overview of the company's financial performance, help identify areas of improvement, and support decision making.CarniTrin is a manufacturer of Carnival costumes in a highly competitive market. The company's management team is seeking guidance on the use of financial performance measures to identify the key drivers of the company's financial performance and develop a strategy to improve it. The following data relate to the company for the year 2019: In its clothing division, the company has $4,000,000 invested in assets. After-tax operating income from sales of clothing in 2019 is $700,000. Income for the clothing division has grown steadily over the last few years The cosmetics division has $12,000,000 invested in assets and an after-tax operating income in 2019 of $1,700,000 The weighted-average cost of capital for CarniTrin is 10% and the…arrow_forwardFinancial performance measures are essential tools used by managers to evaluate the financial health of their organization. They provide an overview of the company's financial performance, help identify areas of improvement, and support decision making. CarniTrin is a manufacturer of Carnival costumes in a highly competitive market. The company's management team is seeking guidance on the use of financial performance measures to identify the key drivers of the company's financial performance and develop a strategy to improve it. The following data relate to the company for the year 2019: In its clothing division, the company has $4,000,000 invested in assets. After-tax operating income from sales of clothing in 2019 is $700,000. Income for the clothing division has grown steadily over the last few years. The cosmetics division has $12,000,000 invested in assets and an after-tax operating income in 2019 of $1,700,000. The weighted-average cost of capital for CarniTrin is 10% and…arrow_forward
- Describing the balanced scorecard and identifying key performance indicators for each perspective Consider the following key performance indicators, and classify each indicator according to the balanced scorecard perspective it addresses. Choose from the financial perspective, customer perspective, internal business perspective, and the learning and growth perspective. a. Number of customer complaints b. Number of information system upgrades completed c. Residual income d. New product development time e. Employee turnover rate f. Percentage of products with online help manuals g. Customer retention h. Percentage of compensation based on performance i. Percentage of orders filled each week j. Gross margin growth k. Number of new patents l. Employee satisfaction ratings m. Manufacturing cycle time (average length of production process) n. Earnings growth o. Average machine setup time p. Number of new customers q. Employee promotion rate r. Cash flow from operations s. Customer…arrow_forwardDescribing the balanced scorecard and identifying key performance indicators for each perspective Consider the following key performance indicators, and classify each according to the balanced scorecard perspective it addresses. Choose from a financial perspective, customer perspective, internal business perspective, or learning and growth perspective. Number of employee suggestions implemented Revenue growth Number of on-time deliveries Percentage of salesforce with access to real-time inventory levels Customer satisfaction ratings Number of defects found during the manufacturing Number of warranty claims Return on investment Variable cost per unit Percentage of market share Number of hours of employee training Number of new products developed Yield rate (number of units produced per hour) Average repair time Employee satisfaction Number of repeat customersarrow_forwardFinancial performance measures are essential tools used by managers to evaluate the financialhealth of their organization. They provide an overview of the company's financialperformance, help identify areas of improvement, and support decision making.CarniTrin is a manufacturer of Carnival costumes in a highly competitive market. Thecompany's management team is seeking guidance on the use of financial performancemeasures to identify the key drivers of the company's financial performance and develop astrategy to improve it.The following data relate to the company for the year 2019: In its clothing division, the company has $4,000,000 invested in assets. After-taxoperating income from sales of clothing in 2019 is $700,000. Income for the clothingdivision has grown steadily over the last few years. The cosmetics division has $12,000,000 invested in assets and an after-tax operatingincome in 2019 of $1,700,000. The weighted-average cost of capital for CarniTrin is 10% and the 2018’s…arrow_forward
- Describing the balanced scorecard and identifying key performance indicators for each perspective Consider the following key performance indicators, and classify each according to the balanced scorecard perspective it addresses. Choose from financial perspective, customer perspective, internal business perspective, or learning and growth perspective. a. Number of employee suggestions implemented b. Revenue growth c. Number of on-time deliveries d. Percentage of sales force with access to real-time inventory levels e. Customer satisfaction ratings f. Number of defects found during manufacturing g. Number of warranty claims h. Return on investment i. Variable cost per unit j. Percentage of market share k. Number of hours of employee training l. Number of new products developed m. Yield rate (number of units produced per hour) n. Average repair time o. Employee satisfaction p. Number of repeat customersarrow_forwardBreaking down resistance to a new strategic vision typically requires that management, on an as needed basis, Select one: O A. reiterate the company's need for the new direction, while addressing employee concerns head- on, calming fears, lifting spirits, and providing them with updates and progress reports as events unfold. O B. raise wages and salaries to win the support of company personnel for the company's new direction. O C. institute a balance scorecard to measuring company performance, with the balance including a mixture of both old and new performance measures. O D. explain all updates and merits of the company's business model to align strategy with employee concerns. O E. inform company personnel about forthcoming changes in the company's strategy.arrow_forwardAs the financial analysts of Mezza Holding Company you are required to write a Memo to the Financial Manager describing the performance of the company and your suggestions on future improvements based on the following financial statements. . State the purpose of your Memo. Describe and interpret ratio results and provide company’s performance analysis based on them. Describe the weaknesses and strength of the company’s financial data. Provide suggestions on how to improve company’s performance.arrow_forward
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