Fundamentals of Cost Accounting 3rd Edition by William N. Lanen, Shannon W. Anderson, Michael Maher

Exercise 21

Balanced Scorecards and Strategy Maps

Crane Company has decided to adopt a balanced scorecard to monitor performance. The company’s strategy is to be the low-cost leader in the industry. The initial scorecard recommended by a consultant includes the following measures in each of the perspectives:

Perspective	Objectives	Perspective	Objectives
Financial	• Increased ROI	Internal	• Improved quality
	• Increased EPS
Customer	• Delivery time	Learning and growth	• Employee satisfaction
	• Repeat orders		• Increased employee skills

Required

Comment on the scorecard and make recommendations about adding or deleting measures to align the scorecard with the company’s strategy.

Step 1 of 3

Business strategy

It is an approach used by a company for deploying its resources, assets and capabilities to provide maximum returns to its investors and meeting customer expectations. It is component of high-level strategy plan and defines value preposition.

Balance scorecard