1. Explorers, Limited will adopt a balanced scorecard system next year and has compiled the list of possible performance measures shown below. Select the aspect of the balanced scorecard that matches each performance measure and explain the connection between each performance measure and the aspect of the balanced scorecard system that you matched to that performance measure.
|
Performance Measure
|
Balanced Scorecard Aspect
|
|
|
|
|
1. Residual income
|
A. Financial (investors)
|
|
2. Consumer satisfaction
|
B. Learning and growth (employees)
|
|
3. Employee absenteeism
|
C. Internal business processes
|
|
4. Increase in profits
|
D. Customers
|
|
5. On-time deliveries
|
|
|
6. Manufacturing process time
|
2. Magic Lawnmower Company assembles lawnmowers from a number of different parts. Some of those parts are manufactured by Magic Lawnmower and some of the parts are purchased from other companies. The vendor for the blades that Magic Lawnmower uses has just increased the price of blades to $10 per blade for the first 5,000 blades and $9 per blade for all blades ordered during the year in excess of 5,000. Magic Lawnmower expects to use 7,500 blades this year. Magic lawnmower can make the blades for the following unit costs:
|
Direct materials
|
$3.50
|
|
Direct labor
|
$1.75
|
|
Variable manufacturing overhead
|
$4.25
|
Should Magic Lawnmower make the blades or continue to buy the blades from its vendor?
3. The balance sheet for the Sand Dollar division of Stellar Company shows that for 2011 it had operating assets at the beginning of the year of $250,000 and $300,000 at the end of the year. During the year, the division had $14,000 of net operating income on sales of $450,000.
A. What is the ROI of the division?
B. If sales were $600,000 and net operating income was $30,000 and operating assets at the end of the year were $350,000, what would ROI be?