One subunit of Keener Sports Company had the following financial results last month:

Requirements
1. Compute the performance evaluation report for this subunit (round to three decimal places).
2. Based on the data presented, what type of responsibility center is this subunit?
3. Which items should be investigated if part of the management's decision criteria is to investigate all variances equal to or exceeding $12,500 and exceeding 14% (both criteria must be met)?
4. Should only unfavorable variances be investigated? Explain.
5. Is it possible that the variances are due to a higher-than-expected sales volume? Explain.
6. Do you think management will place equal weight on each of the $12,500 variances? Explain.
7. Which balanced scorecard perspective is being addressed through this performance report? In your opinion, is this performance reports a lead or lag indicator? Explain.
8. Give one key performance indicator for the other three balanced scorecard perspectives. Indicate which perspective is being addressed by the indicator you list. Are they lead or lag indicators? Explain.

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Flexible Budget Flexible Budget Variance (U or F) Variance % (U or F)" Keener Sports Subunit X Actual $430,000 $400,000 325,000 312,500 Sales Cost of goods sold... $105,000 87,500 37,500 Gross margin Operating expense Operating income before 66,150 50,000 service department charges.. Service department charges 37.500 23.00 (allocated.. Operating income .. 38,850 28,650 25,000