1)Assume the CFO of your organization approaches you to ask your advice about implementing the Balanced Scorecard at your organization.  What steps would you encourage him or her to take in order to successfully implement and use the Scorecard to manage the organization?  Be sure to describe any roadblocks to be avoided.

            *On a broad level I would inform the CFO that a Balanced Scorecard is a serious strategic initiative.  It is not simply a "dashboard" and it goes beyond simple metrics.  Additionally, the metrics are linked in a cause and effect manner.  In contrast to many financial accounting methods, the ultimate goal of the Balanced Scorecard is for management to be able to look forward and is for an organization's internal use.  Management must also take into consideration the behavioral consequences that the Scorecard will have for the organization's employees. 

            A Balanced Scorecard uses a strategy map to show cause and effect relationships between metrics.  The Balanced Scorecard has four main areas.  The first is the financial perspective, which deals with how a company's shareholders perceive the organization.  This category must have roughly 5 metrics that can be measured.The second area the Scorecard focuses on is customers.  This area will also have 5 metrics.  Third is the internal and process perspective which has from 8 to 10 metrics.  This area is comprised of operations processes, customer management processes, innovation processes, and social and regulatory processes.  The fourth and last area of the Balanced Scorecard is the learning and growth perspective, which deals with innovation and continuous improvement.

            The financial perspective uses some GAAP measures used in financial accounting such as gross margins and can be more specific non-GAAP measures such as revenue from a new product line.  The customer perspective focuses on an organization's value proposition and uses metrics such as customer retention and market share.  The internal/process perspective deals with delivering an organization's value proposition and productivity improvements and is the most complex area of the Balanced Scorecard.  Lastly, the social and regulatory element of a Balanced Scorecard of a company's environmental practices, health and safety issues, employee relations, and community investment.There are also some additional pitfalls that must be avoided when implementing a Balanced Scorecard.  There may be too many financial measures or metrics may not be forward looking.  Additionally, and perhaps most importantly, senior management must be fully committed to the implementation of a Balanced Scorecard.

2) Find the break-even prices in units and dollars for products 1 and 2:

With the current budgeting sales mix intact, Product 1 will have a break-even in units of 108,000 and a break-even in price of $1,296,000.  Product 2 will have a break-even in units of 88,000 and a break-even in price of $1,584,000.  See the additionally submitted excel fil to view the calculations, including variable cost per unit and fixed cost for each product.