Joan’s Fabrics has employed a balanced scorecard for several months now. Results for the first quarter after the full rollout are as below:

The firm computes the incentive payout for managers based on a formula.

• Begin by computing a score for each category. With the target scored as 100, you earn points in proportion to your actual score. Scores are truncated at 120% for each category. Thus, you get the same points whether you exceed the target by 20% or a higher amount. All percent computations are rounded to two decimal points (e.g., 90.32%). The percent discount category is reverse coded, meaning that a low discount is better than a high discount from Robinson’s perspective.

• We combine scores across categories by weighting financials at 40%, customer satisfaction at 30%, and the remaining two categories at 15% each.

• The base bonus is set companywide. For this year, the base bonus is 30% of the annual salary. The bonus payable to an individual is the base bonus rate times your factor score. Thus, if you scored 120% on all four categories, your weighted factor score would be 1.2 and you would receive a bonus payout of 30 × 1.2 = 36% of your annual salary. • No bonus, however, is payable if the score on any category is less than 90%.

Required:

Compute the bonus payable to a division manager reporting the scorecard data in the problem.

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Budget Actual 22% ROA Customer satisfaction scores 18.5% 85% 90% Average discount per sales $ 4.5% 5% Sales from new SKUS 20% 26%