Problem 1

Problem 1
For each of the following measures, identify which perspective of the balanced scorecard it represents. Please indicate
whether it is financial perspective, customer perspective, internal-business-process perspective, or learning and growth
perspective
1. Service response time

2. Market share
3. Gross margin percentage
4. Defect rates
5. Customer satisfaction
6. New-product development time
7. Economic value added
8. Employee education
9. Manufacturing downtime
10. Earnings per share
11. Manufacturing-cycle efficiency
12. Machine downtime
13. Number of patents held
14. Employee suggestions
15. Number of repeat sales
16. Level of inventories held
17. Number of vendors used
18. Cash flow from operations
19. Employee training hours
20. Gross margin
21. Number of customer complaints
22. Number of warranty claims
23. Number of products returned
24. Number of new products introduced
25. The efficiency and effective use of employee
Problem 2
Amber Products Inc. has two product lines: A-100 and A-200. Revenue and cost information for each of the product lines
for the year are as follows
A-100 A-200
Selling price per unit 60 45
Variable cost per unit 25 15
Traceable fixed expenses 40,000 30,000
During the year Amber had common fixed expenses of 50,000, and the company produced and sold 4,000 units of A-100
and A-200. Prepare a segmented income statement wit a column for each product line and the total company
Problem 3
El campo is a division major corporation. The following data are for the lates year of operations
Sales 10,890,000
Net operating income 609,840
Average operating assets 3,000,000
The company’s minimum required rate of return 16%
• What is the division’s profit margin
• What is the divisions turnover
• What is the division’s return on investment
• What is the divisions residual income
Problem 4
The following data pertain to Dana Industries
Interest rate on debt capital 9%
Cost of equity capital 12%
Before-tax operating income 35 million
Market value of debt capital 60 million
Market value of equity capital 120 million
Total assets 150 million
Income tax rate 30%
Total current liabilities 15 million
• Compute Dana’s weighted-average cost of capital
• Compute Dana’s economic value added
Problem 5
The following data refer to AIM division of Master company
Average selling price 100
Average variable cost 40
Total fixed costs 2,000,000
Average investment 5,000,000
• How many units must AIM sell to earn an 18% ROI
• If the division sells 60,000 units, what will ROI be?
• The minimum desired ROI is 14%. At the sales volume of 55,000 units, what is residual income
• The manager desires a 22% ROI and wishes to sell 50,000 units. What selling price must the division charge
• Using the original information, if the minimum ROI is 20% and RI is 300,000, what are sales in units
Problem 6
The following information for a recent project was taken from the records of Great company
Processing time 15 days
Inspection time .5 days
Waiting time:
From order receipt until start of production 6 days
From start of production until project completion 3 days
Move time 1.5 days
• How long did it take to complete the project once production commenced
• Compute the manufacturing cycle efficiency
Problem 7
Charity products INC. produces a variety of electronic products which it sells to retail stores throughout the country. The
following data is available for the year for one of the products
Units started into production 2,000,000
Total good units completed 1,950,000
Total hours of value-added production time 300,000
Total production hours 380,000
• Compute the manufacturing cycle efficiency
• What is the total throughout per hour
Problem 8
The Cute corporation produces small plastic dolls in its Florida manufacturing plant. The company is currently
evaluating ways to improve productivity. The accountant of the firm’s parent organization suggested that
management implement a new compensation plan based on throughput performance measure as an incentive to
increase productivity. To demonstrate how such a measure might work, the accountant gathered the following
production data for a recent month
Total units attempted 6,000,000
Good units manufactured 4,800,000
Processing time(total hours) 800
Value-added processing time 600
• How many defective units were produced
• Compute manufacturing cycle efficiency
• Compute process productivity
• Compute process quality yield
• Compute hourly throughput

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1. Service response time

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