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B. Aligning the Balanced Scorecard to Strategy Ginsberg Engineering Company manufactures electric motors for sale to producers of washing machines. In the past, Stan Grossman, the Operations Manager at Ginsberg Engineering, has been rewarded based on the number of units produced each month, and this has led to actions that are inconsistent with maximising shareholder value. Near the end of each quarter, Grossman estimates expected production in relation to his target. If expected production is below the target, he runs extra shifts in an attempt to meet his production target. As Ginsberg Engineering has limited storage space, this often results in the delivery of motors to customers ahead of time. This is a problem for many customers, who also have limited storage space. Sheryl Hoover, the CEO of Ginsberg Engineering, decided to implement a balanced scorecard (BSC) for the Operations Division, with the specific purpose of eliminating the perverse incentive described above. Hoover believes it is inefficient to build a new BSC, and so she simply copied the BSC used in her last firm. An extract of this BSC is as follows: PERSPECTIVE OBJECTIVE LAG INDICATOR LEAD INDICATOR Financial Improved profitability Profit Cost per unit Customer Improve customer satisfaction Customer satisfaction Customer returns Internal Business Increase product quality Customer returns Defect rates Learning & Growth Improve staff capability Staff quality skills audit score Quality training programs delivered Also, while Hoover believes the BSC is useful in monitoring performance, she believes that all managers need to be rewarded in a consistent way, and so she based all divisional managers' (including Grossman's) bonuses on their profit compared to budget. After twelve months of using this BSC, the perverse incentive still exists
On August 1, 2011, Lane Corporation called its 10% convertible bonds for conversion. The $8,000,000 par bonds were converted into 320,000 shares of $20 par common stock. On August 1, there was $700,000 of unamortized premium applicable to the bond..
Space coast city issued the following during the year ended September 30, 2010: (1) $200,000 in bonds for the installation of stop signs, to be assessed against properties benefited, but secondarily backed by the city; (2) $320,000 in bonds for const..
What are the advantages and disadvantages to FSC's decision to not use the BSC as a performance tool- i.e., linking it to the employee evaluation and reward system?
Bodin Company budgets on an annual basis. The following beginning and ending inventory levels (in units) are plannned for the year 20x1. One units of raw material are required to produce each unit of finished product.
If you purchased a new model of a digital camera right after it is released, you will likely pay more than if you purchase it six months after release. Explain why this is an example of price discrimination on the part of the firm.
Which of the following is not one of the functions of the Securities and Exchange Commission? a. Providing government-backed insurance to purchasers of securities.
Canliss Mining uses the retirement method to determine depreciation on its office equipment. During 2009, its first year of operations, office equipment was purchased at a cost of $14,000.
There were no other items includable in her gross income. What is the amount of her adjusted gross income?
"The difference between practical capacity and master-budget capacity utilization is the best measure of management's ability to balance the costs of having too much capacity and having too little capacity." Do you agree with this statement? Why o..
In the current year, Hanna Company reported warranty expense of $196,000 and the warranty liability account increase $13,000. What were warranty expenditures during the year?
The CEO paid $1220 for an expensive dinner and spent $600 for the game. What is the deductible amount of these expenses?
Lomax Enterprises purchased a depreciable asset for $27,500 on March 1, Year 1. The asset will be depreciated using the straight-line method over its four-year useful life. Assuming the asset's salvage value is $3,100,
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