Chapter-10
Case: 10-2(Solartronics, Inc.)
Question1: Why are the reported results for January so poor, particularly in light of the expected, average monthly profit of $30,000?
Answer: In the summarized income statement shows that sales is 165,000 but in budgeted income statement it was 3000000/12=250000 in average monthly. On the other hand direct labor, variable overhead and fixed factory overhead were unfavorable because these were higher than those of budgeted income statement.
Question2: What additional data would be useful in analyzing the firm's January performance? Why?
Answer: In budgeted income statement, Operating variance such as direct labor, direct material, variable factory overhead, fixed factory overhead-spending, fixed factory overhead-volume were not given according to monthly. If there are revenue variance, selling price variance, mix and volume variance, mix variance, volume variance, other revenue analysis, market share variance, industry volume variance, expense variance in the analysis statement given then it would be useful data for analyzing the firm's January performance because these data can inform us the difference between the revenue and expenses.
Balanced Scorecard Basics
The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals. It was originated by Drs. Robert Kaplan (Harvard Business School) and David Norton as a performance measurement framework that added strategic non-financial performance measures to traditional financial metrics to give managers and executives a more 'balanced' view of organizational performance. While the phrase