Solutions Manual For
Financial & Managerial
th
Accounting, 15 Edition By
Carl Warren, James Reeve,
Jonathan Duchac
(All Chapters 1-28, 100%
Original Verified, A+ Grade)
All Chapters Arranged
Reverse: 28-1
This is The Original Solutions
Manual For 15th Edition, All
other Files in The Market are
Fake/Old/Wrong Edition.
, CHAPTER 28 (FIN MAN); CHAPTER 14 (MAN)
THE BALANCED SCORECARD AND
CORPORATE SOCIAL RESPONSIBILITY
DISCUSSION QUESTIONS
1. A strategic performance measurement system defines and links strategic objectives to the performance metrics that
a company uses. This system helps a company to align metrics with overall goals and objectives (both financial
and nonfinancial) and thereby measure performance relating to company strategy. The balanced scorecard is the
most well-known example of a strategic performance management system.
2. Leading indicators are metrics that indicate something about performance in the future. For example, poor customer
satisfaction may indicate that sales will be down next month. Lagging indicators are metrics that indicate something
about performance that has already happened. For example, this month’s actual sales is a lagging indicator of last
month’s customer satisfaction.
3. The purpose of the performance perspectives is primarily to help management look beyond the typical financial
measures of performance, such as sales and profits, encouraging a more balanced view of performance. Performance
perspectives also help to organize the balanced scorecard into types of performance.
4. Strategic objectives define the purpose of an action taken within the company. They are essentially subcomponents
of the organization’s overall mission statement or strategy. Strategic initiatives are action plans that management
implements to achieve the strategic objectives. In other words, strategic objectives are different goals a company
wants to achieve, and strategic initiatives are the plans a company makes to achieve those goals.
5. Strategy maps show the expected cause-and-effect relationships amoung strategic objectives. For example, a strategy
map may illustrate that fulfilling the strategic objective to reduce delivery times will cause customers to be more
satisfied, contributing to a separate strategic objective to please the customer. Strategy maps add value to the
balanced scorecard by illustrating how each strategic objective contributes to the overall mission or strategy of the
company.
6. Some objectives on a company-wide scorecard may not specifically relate well to the company’s specific
departments (e.g., Shipping & Receiving, Sales, Production, etc.). However, to be effective, balanced scorecards
should be relevant for each level of management in the company. Scorecard cascading accomplishes this purpose by
using multiple scorecards that are divided up into smaller, division- and job-specific scorecards.
7. People subject to motivated reasoning tend to ignore bad news, rely too heavily on good news, stop gathering
information when results look good, continue searching for good news when things look bad, and interpret ambiguous
news as good news.
8. A company using scorecard cascading will have unique scorecards for each division or department of the company
and for each level of management. This makes it difficult for top-level managers to compare the performance of
employees or managers in different divisions, because their performance will likely be measured by different metrics.
This will tempt top-level managers to place more weight on performance metrics that these employees have in
common and possibly ignore performance metrics unique to each employee. This constitutes common measures bias.
28-1
, CHAPTER 28 (FIN MAN); CHAPTER 14 (MAN) The Balanced Scorecard and Corporate Social Responsibility
DISCUSSION QUESTIONS (Concluded)
9. Corporate social responsibility is the general term for the efforts of companies to take responsibility for the impact
their operations have on society and to improve social well-being within and outside the firm. Sustainability efforts
are corporate social responsibility activities that involve ensuring the ability to meet current needs without
compromising the ability of future generations to meet their needs (e.g., efforts to protect the environment).
10. Companies can use the balanced scorecard to address CSR objectives in a variety of ways. One way is to include CSR
objectives and activities in a separate CSR performance perspective. Alternatively, companies can integrate CSR
strategic objectives into the four perspectives of the balanced scorecard, creating what is called a sustainability balanced
scorecard.
28-2
, CHAPTER 28 (FIN MAN); CHAPTER 14 (MAN) The Balanced Scorecard and Corporate Social Responsibility
BASIC EXERCISES
BE 28–1 (FIN MAN); BE 14–1 (MAN)
Leading indicators:
Employee turnover
Number of shipping errors
Median training hours per employee
Lagging indicators:
Number of new customers
Total sales
Market share
Remember: A leading indicator can be any metric where performance is predictive of performance in
another metric. Similarly, a lagging indicator can be any metric where performance is predicted by
performance in another metric.
BE 28–2 (FIN MAN); BE 14–2 (MAN)
Performance Possible Performance Metrics
Strategic Objective Perspective (Not an exhaustive list)
Increase profits Financial • Market share
• Operating profit
• Gross profit
Obtain new Customer • Number of new customers
customers • Percentage of sales from new customers
• Number of leads
Improve production Internal • Average production time per product
efficiency processes • Total costs of production
• Average cost of production per product
Recruit top Learning • Percentage of entry-level hires with
candidates and growth master’s degree
• Percentage of entry-level hires from top
10 colleges
• Percentage of interns from top 10 colleges
who become full-time hires
BE 28–3 (FIN MAN); BE 14–3 (MAN)
Sales $ 230,000
Cost of goods sold (150,000)
Depreciation expense (30,000)
Other expense (20,000)
Net income $ 30,000
Cost of shipping error: $3,000 + $2,000 = $5,000
Break-even shipping errors: $30,000 ÷ $5,000 = 6
28-3
Financial & Managerial
th
Accounting, 15 Edition By
Carl Warren, James Reeve,
Jonathan Duchac
(All Chapters 1-28, 100%
Original Verified, A+ Grade)
All Chapters Arranged
Reverse: 28-1
This is The Original Solutions
Manual For 15th Edition, All
other Files in The Market are
Fake/Old/Wrong Edition.
, CHAPTER 28 (FIN MAN); CHAPTER 14 (MAN)
THE BALANCED SCORECARD AND
CORPORATE SOCIAL RESPONSIBILITY
DISCUSSION QUESTIONS
1. A strategic performance measurement system defines and links strategic objectives to the performance metrics that
a company uses. This system helps a company to align metrics with overall goals and objectives (both financial
and nonfinancial) and thereby measure performance relating to company strategy. The balanced scorecard is the
most well-known example of a strategic performance management system.
2. Leading indicators are metrics that indicate something about performance in the future. For example, poor customer
satisfaction may indicate that sales will be down next month. Lagging indicators are metrics that indicate something
about performance that has already happened. For example, this month’s actual sales is a lagging indicator of last
month’s customer satisfaction.
3. The purpose of the performance perspectives is primarily to help management look beyond the typical financial
measures of performance, such as sales and profits, encouraging a more balanced view of performance. Performance
perspectives also help to organize the balanced scorecard into types of performance.
4. Strategic objectives define the purpose of an action taken within the company. They are essentially subcomponents
of the organization’s overall mission statement or strategy. Strategic initiatives are action plans that management
implements to achieve the strategic objectives. In other words, strategic objectives are different goals a company
wants to achieve, and strategic initiatives are the plans a company makes to achieve those goals.
5. Strategy maps show the expected cause-and-effect relationships amoung strategic objectives. For example, a strategy
map may illustrate that fulfilling the strategic objective to reduce delivery times will cause customers to be more
satisfied, contributing to a separate strategic objective to please the customer. Strategy maps add value to the
balanced scorecard by illustrating how each strategic objective contributes to the overall mission or strategy of the
company.
6. Some objectives on a company-wide scorecard may not specifically relate well to the company’s specific
departments (e.g., Shipping & Receiving, Sales, Production, etc.). However, to be effective, balanced scorecards
should be relevant for each level of management in the company. Scorecard cascading accomplishes this purpose by
using multiple scorecards that are divided up into smaller, division- and job-specific scorecards.
7. People subject to motivated reasoning tend to ignore bad news, rely too heavily on good news, stop gathering
information when results look good, continue searching for good news when things look bad, and interpret ambiguous
news as good news.
8. A company using scorecard cascading will have unique scorecards for each division or department of the company
and for each level of management. This makes it difficult for top-level managers to compare the performance of
employees or managers in different divisions, because their performance will likely be measured by different metrics.
This will tempt top-level managers to place more weight on performance metrics that these employees have in
common and possibly ignore performance metrics unique to each employee. This constitutes common measures bias.
28-1
, CHAPTER 28 (FIN MAN); CHAPTER 14 (MAN) The Balanced Scorecard and Corporate Social Responsibility
DISCUSSION QUESTIONS (Concluded)
9. Corporate social responsibility is the general term for the efforts of companies to take responsibility for the impact
their operations have on society and to improve social well-being within and outside the firm. Sustainability efforts
are corporate social responsibility activities that involve ensuring the ability to meet current needs without
compromising the ability of future generations to meet their needs (e.g., efforts to protect the environment).
10. Companies can use the balanced scorecard to address CSR objectives in a variety of ways. One way is to include CSR
objectives and activities in a separate CSR performance perspective. Alternatively, companies can integrate CSR
strategic objectives into the four perspectives of the balanced scorecard, creating what is called a sustainability balanced
scorecard.
28-2
, CHAPTER 28 (FIN MAN); CHAPTER 14 (MAN) The Balanced Scorecard and Corporate Social Responsibility
BASIC EXERCISES
BE 28–1 (FIN MAN); BE 14–1 (MAN)
Leading indicators:
Employee turnover
Number of shipping errors
Median training hours per employee
Lagging indicators:
Number of new customers
Total sales
Market share
Remember: A leading indicator can be any metric where performance is predictive of performance in
another metric. Similarly, a lagging indicator can be any metric where performance is predicted by
performance in another metric.
BE 28–2 (FIN MAN); BE 14–2 (MAN)
Performance Possible Performance Metrics
Strategic Objective Perspective (Not an exhaustive list)
Increase profits Financial • Market share
• Operating profit
• Gross profit
Obtain new Customer • Number of new customers
customers • Percentage of sales from new customers
• Number of leads
Improve production Internal • Average production time per product
efficiency processes • Total costs of production
• Average cost of production per product
Recruit top Learning • Percentage of entry-level hires with
candidates and growth master’s degree
• Percentage of entry-level hires from top
10 colleges
• Percentage of interns from top 10 colleges
who become full-time hires
BE 28–3 (FIN MAN); BE 14–3 (MAN)
Sales $ 230,000
Cost of goods sold (150,000)
Depreciation expense (30,000)
Other expense (20,000)
Net income $ 30,000
Cost of shipping error: $3,000 + $2,000 = $5,000
Break-even shipping errors: $30,000 ÷ $5,000 = 6
28-3
