Cost Accounting Question 12.34 and 12.35. Please do step by step. Following is a

ID: 2479476 • Letter: C

Question

Cost Accounting Question

12.34 and 12.35. Please do step by step.

Following is a random-order fating of perspectives, strategic objectives, and performance measures for the balanced scorecard. For each perspective, select those strategic objectives from the list that best relate to it. For each strategic objective, select the most appropriate performance measure(s) from the list. Balanced scorecard. (R. Kaplan, adapted) Petrocal, Inc., refines gasoline and setts it through its own Petrocal gas stations. On the Price of market research, Petrocal determines that 6O% of the overall gasoline market consists of "service-oriented customers," medium- to high-income indivials who are willing to pay a higher price for gas if the gas stations can provide excellent customer service, such as a clean facility, a convenence store, friendly employees, a quick turnaround, the ability to pay by credit card, and high-octane premium gasoline. The remaining 40% of the overall market are "price shoppers" who look to buy the cheapest gasoline avaiable. Petrocal's strategy is to focus on the 60% of service-oriented customers. Petrocal's balanced scorecard for 2013 follows. For brevity, the initiatives taken under each objective are omitted.

Explanation / Answer

A Balanced scorecard is a strategy management framework. It not only helps management in determining today’s performance but also helps to determine that how the spending on strategic projects today will help to improve the impact in future.

PERSPECTIVES

STRATEGIC OBJECTIVES

Performance Measure

Internal Business Process

Improve Manufacturing Quality

Increase information system capabilities

Increase proprietary products

On time delivery by suppliers

Minimize invoice error rate

Introduce new products

Percentage of process with real time feedback

Percentage of on time deliveries by suppliers.

Percentage of error free invoices

Product cost per unit

Customer

Develop Profitable Customers

Retain Customers

Acquire new Customers

Customer profitability

Percentage of customers retained

Customer cost per unit/Number of new customer

Learning and Growth

Enhance Employee Skills

Increase profit generated by each sales person

Average job related training hours per employee

Employee turnover rate

Profit per sales person

Financial

Increase Shareholders value

Earning Per Share

Return on Equity

Net income

(B ) (1) Financial performance measure indicates whether the company’s srtategy, implementation, and execution are up to the mark or not. Financial goals have to do with Profitability growth and shareholder’s value. Here the company was successful in implementing its strategy in 2013. Though the market share of overall gasoline market has not increased as was targeted by the company but the company has performed well if other factors are seen like financial performance , learning and growth wise and its internal business process related to product quality and reliability all has increased.

(2) Yes it is essential for Petrocal Inc. to introduce some measures of employee learning in its learning and growth process. It must enhance employee skills and increase the profits generated by each of its sales person to achieve the overall target. Learning and growth constitutes the essential foundation for the success of any knowledge worker organization.