Crawford’s Books and Things has a traditional bookstore housed downtown Charlotte. The store has been there forty years, and many customers love the fact that they can hold the books in their hands and browse the offerings. Crawford’s just started an online book division for people who like to order books online.
EVA for the Charlotte store is about $13 million, while EVA for the online division shows a value of -$2.2 million.
A. Explain why it might be better to evaluate the online division using a balanced scorecard.
B. Suggest two measures for the customer dimension that would be appropriate for the online division and two measures for the internal processes dimension of the balanced scorecard that would be appropriate for the online division.
Want to see the full answer?
Check out a sample textbook solutionChapter 12 Solutions
Principles of Accounting Volume 2
Additional Business Textbook Solutions
Principles of Accounting Volume 1
Horngren's Financial & Managerial Accounting, The Financial Chapters (6th Edition)
Cost Accounting (15th Edition)
Managerial Accounting (5th Edition)
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
- A department store in the town of Napar sells cell a popular brand of cell phones to customers in thearea. This cell phone is fairly durable and it has lots of features. The demand for this phone isnormally distributed with a mean of 50 cell phones per day and a standard deviation of 10 phones.The store operates 350 days per year. Ordering cost is $300 per order and the holding cost is 5% of the cost of the phone. The store sells the phone for $800. The lead time is 4 days and the store would like to have a 95% cycle time which is equivalent to 2 standard deviations. Current on-handinventory is 200 cell phones with no open orders or back orders i. Calculate the EOQ? ii. Calculate the number of order placed per year?iii. Calculate the average time between orders?iv. Calculate the ROP? v. An inventory withdrawal of 200 units was just made. - Is it time to reorder?vi. Calculate the total annual cost of using the EOQ.arrow_forwardKowkeela has recently opened The Cooker Shop, a store that specializes in one type of cooker. Kowkeela has just received a degree in business and she is anxious to apply the principles she has learned to her business. In time, she hopes to open a chain of cooker shops. As a first step, she has prepared the following analysis for her new store:Sales price per cooker . . . . . . . . . . . $50Variable expenses per cooker. . . . . . $16Fixed expenses per year:- - - Building rental . . . . . . . . . . . . . . $12000- - - Equipment depreciation . . . . . . $5300- - - Selling . . . . . . . . . . . . . . . . . . . . . $15500- - - Administrative . . . . . . . . . . . . . . $17000 d. Refer to the original data, the number of cookers to be sold each year to break even is (f)Refer to the original data, Kowkeela now has two salespersons working in the store—one full time and one part time. It will cost her an additional $7700 per year to convert the part-time position to a full-time position.…arrow_forwardKindmart is an international retail store. Kindmart’s managers are considering implementing a new business-to-business (B2B) information system for processing merchandise orders. The current system costs Kindmart $2,000,000 per month and $55 per order. Kindmart has two options, a partially automated B2B and a fully automated B2B system. The partially automated B2B system will have a fixed cost of $6,000,000 per month and a variable cost of $45 per order. The fully automated B2B system has a fixed cost of $14,000,000 per month and a variable cost of $25 per order. Based on data from the past two years, Kindmart has determined the following distribution on monthly orders: Required: Prepare a table showing the cost of each plan for each quantity of monthly orders. What is the expected cost of each plan? In addition to the information system’s costs, what other factors should Kindmart consider before deciding to implement a new B2B system?arrow_forward
- Kindmart is an international retail store. Kindmart’s managers are considering implementing a new business-to-business (B2B) information system for processing merchandise orders. The current system costs Kindmart $2,000,000 per month and $55 per order. Kindmart has two options, a partially automated B2B and a fully automated B2B system. The partially automated B2B system will have a fixed cost of $6,000,000 per month and a variable cost of $45 per order. The fully automated B2B system has a fixed cost of $14,000,000 per month and a variable cost of $25 per order. Based on data from the past two years, Kindmart has determined the following distribution on monthly orders: Monthly Number of Orders Probability 300,000 0.25 500,000 0.45 700,000 0.30 Q3. In addition to the information system’s costs, what other factors should Kindmart consider before deciding to implement a…arrow_forwardKindmart is an international retail store. Kindmart’s managers are considering implementing a new business-to-business (B2B) information system for processing merchandise orders. The current system costs Kindmart $2,000,000 per month and $55 per order. Kindmart has two options, a partially automated B2B and a fully automated B2B system. The partially automated B2B system will have a fixed cost of $6,000,000 per month and a variable cost of $45 per order. The fully automated B2B system has a fixed cost of $14,000,000 per month and a variable cost of $25 per order. Based on data from the past two years, Kindmart has determined the following distribution on monthly orders: Monthly Number of Orders Probability 300,000 0.25 500,000 0.45 700,000 0.30 Q2. What is the expected cost of each plan?arrow_forwardKindmart is an international retail store. Kindmart’s managers are considering implementing a new business-to-business (B2B) information system for processing merchandise orders. The current system costs Kindmart $2,000,000 per month and $55 per order. Kindmart has two options, a partially automated B2B and a fully automated B2B system. The partially automated B2B system will have a fixed cost of $6,000,000 per month and a variable cost of $45 per order. The fully automated B2B system has a fixed cost of $14,000,000 per month and a variable cost of $25 per order. Based on data from the past two years, Kindmart has determined the following distribution on monthly orders: Monthly Number of Orders Probability 300,000 0.25 500,000 0.45 700,000 0.30 Q1. Prepare a table showing the cost of each plan for each quantity of monthly orders.arrow_forward
- Grant's Western Wear is a retailer of western hats located in Atlanta, Georgia. Although Grant's carries numerous styles of western hats, each hat has approximately the same price and invoice purchase cost, as shown below. Sales personnel receive large commissions to encourage them to be more aggressive in their sales efforts. Currently the economy of Atlanta is really humming, and sales growth at Grant's has been great. However, the business is very competitive, and Grant has relied on its knowledgeable and courteous staff to attract and retain customers, who otherwise might go to other western wear stores. Also, because of the rapid growth in sales, Grant is finding it more difficult to manage certain aspects of the business, such as restocking of inventory and hiring and training new salespeople. Sales price $ 44.00 Per-unit variable costs: Invoice cost 19.00 Sales commissions 5.80 Total per-unit variable costs $ 24.80 Total annual fixed…arrow_forwarda retailer in the home improvement industry, currently operates seven retail outlets in Manama and Dubai. Management is contemplating building an eighth retail store across town from its most successful retail outlet. The company already owns the land for this store, which currently has an abandoned warehouse located on it. Last month, the marketing department spent $10,000 on market research to determine the extent of customer demand for the new store. Now Noor Supply must decide whether to build and open the new store. Which of the following should be included as part of the incremental earnings (or cash flow) for the proposed new retail store? The cost of the land where the store will be located. The cost of demolishing the abandoned warehouse and clearing the lot. The loss of sales in the existing retail outlet, if customers who previously drove across town to shop at the existing outlet become customers of the new store instead. The $10,000 in market research spent to…arrow_forwardWheels Inc. is a manufacturer of bicycles sold through retail bicycle shops in the southeastern United States. The company has two sales people that do more than just sell the product-they manage relationships with the bicycle shops to enable them to better meet the consumers' needs. The company's sales reps visits the shop several times per year, often for hours at a time. The owner of wheels is considering expanding to the rest of the country and would like to have distribution through 1000 bicycle shops. To do so, Howe the company would have to hire more salespeople. Each sales person earn $40,000 plus 2 percent commission on all sales. Another alternative is to use the services of sales agents instead of its own sales force. Sales agents would be paid 5 percent of sales. a) determine the number of sales people Wheels need if it has 1000 bicycle shop accounts that need to be called on four time per year. Each sales call lasts approximately 2.5 hours, and each sales rep has…arrow_forward
- Garrison Boutique, a small novelty store, just spent $4,000 on a new software program that will help in organizing its inventory. Due to the steep learning curve required to use the new software, Garrison must decide between hiring two part-time college students or one full-time employee. Each college student would work 20 hours per week, and would earn $1 S per hour. The full-time employee would work 40 hours per week and would earn $15 per hour plus the equivalent of $2 per hour in benefits. Employees are given two polo shirts to wear as their uniform. The polo-shirts cost Garrison $10 each. What are the relevant costs, relevant revenues, sunk costs, and opportunity costs for Garrison?arrow_forwardYou own a small business that produces high quality cut flowers. While you have many customers your largest buyer is Blooming Smart Ltd, a large retail outfit with a national chain of outlets that accounts for 50% of your orders on average. Blooming Smart Ltd has now requested that you extend credit terms to them better than what you offer to your other buyers. 1)How could this affect your operating cycle? (300 words)arrow_forwardResource Usage Model, Special Order Ehrling, Inc., manufactures metal racks for hanging clothing in retail stores. Ehrling was approached by the CEO of Carly's Corner, a regional nonprofit food bank, with an offer to buy 350 heavy-duty metal racks for storing canned goods and dry food products. While racks normally sell for $245 each, Carly's Corner offered $75 per rack. The CEO explained that the number of families they served had grown significantly over the past two years, and that the charity needed additional storage for the donated food items. Since Ehrling is operating at 80 percent of capacity, and Ehrling employees have "adopted" Carly's Corner as their annual charity, the company wants to make the special order work. Ehrling's controller looked into the cost of the storage racks using the following information from the activity-based accounting system: Activity Rate** Unused Quantity Activity Driver Capacity Demanded* Fixed Variable Direct materials Number of racks 350 $82…arrow_forward
- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College