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Balanced Scorecard Approach

Question One:
What are the four perspectives looked at by the balanced scorecard approach?

Question Two:
Keep-it-Hot, Inc. manufactures popular thermoses. On June 30, the company has 1,000 thermoses in inventory. Each thermos sells for $8.00. The company's policy is to maintain a thermos inventory equal to 10% of next month's sales. The company expects the following sales activity for the third quarter of the year:

July 7,000 units
August 15,000 units
September 10,000 units

In addition, October's sales are expected to be 9,000 units.

Required:

A.Prepare a sales budget for the third quarter of the year.
B.Prepare a production budget for the third quarter of the year.

Question Three:
At the end of the current year, Bowman Products, Inc. has the following information available comparing the cost of direct materials on its flexible budget with the actual costs of direct materials:

Flexible Budget Actual Results Difference

Direct Materials $24,000 $30,000 $(6,000)

Sally V., the company's controller, has requested a meeting with Hank R., the operations manager, asking him to explain why direct materials costs were more than what had been budgeted.

What two kinds of variance analysis should Hank do before his meeting with Sally? What would each of these variances measure?

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Question One:

What are the four perspectives looked at by the balanced scorecard approach?

The four perspectives looked at by the balanced scorecard approach include the customer's perspective, the internal business perspective, the innovation and learning perspective, and the financial perspective. Each perspective is further explained as follows: -
? The customer's perspective. Managers must know if their organization is satisfying customer needs. They must determine the answer to the question, How do customers see us?
? The internal business perspective. Managers need to focus on those critical internal operations that enable them to satisfy customer needs. They must answer the question, What must we excel at?
? The innovation and learning perspective. An organization's ability to innovate, improve, and learn ties directly to its value as an ...

Solution Summary

This solution is comprised of a detailed explanation to answer the four perspectives looked at by the balanced scorecard approach, prepare a sales budget and a production budget for the third quarter of the year, and prepare variance analysis for Bowman Products, Inc.

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