Question
1. American Express Company is a major financial services company, noted for its American Express card. Below are some of the performance measures used by
1. American Express Company is a major financial services company, noted for its American Express card. Below are some of the performance measures used by the company in its balanced scorecard follow:
Average card member spending |
Cards in force |
Earnings growth |
Hours of credit consultant training |
Investment in information technology |
Number of card choices |
Number of Internet features |
Number of merchant signings |
Number of new card launches |
Return on equity |
Revenue growth |
For each measure, identify whether the measure best fits the innovation, customer, internal process, or financial dimension of the balanced scorecard.
2. Materials used by the Instrument Division of XPort Industries are currently purchased from outside suppliers at a cost of $210 per unit. However, the same materials are available from the Components Division. The Components Division has unused capacity and can produce the materials needed by the Instrument Division at a variable cost of $160 per unit.
a. If a transfer price of $180 per unit is established and 60,000 units of materials are transferred, with no reduction in the Components Division's current sales, how much would XPort Industries' total income from operations increase?
b. How much would the Instrument Division's income from operations increase?
c. How much would the Components Division's income from operations increase?
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