18-55 Balanced Scorecard; Strategic Business Units; Ethics Pittsburgh-Walsh Company, Inc. (PWC), manufactures lighting fixtures and electronic timing devices. The lighting fixtures division assem- bles units for the upscale and mid-range markets. The trend in recent years as the economy has been expanding is for sales in the upscale market to increase while those in the mid-range market have been relatively flat. Over the years, PWC has tried to maintain strong positions in both markets, believing it is best to offer customers a broad range of products to protect the company against a sharp decline in either market. PWC has never been the first to introduce new products but watches its competitors closely and quickly follows their lead with comparable products. PWC is proud of its customer service functions, which have been able to maintain profitable relationships with several large customers over the years. The electronic timing devices division manufactures instrument panels that allow electronic sys- tems to be activated and deactivated at scheduled times for both efficiency and safety purposes. Both divisions operate in the same manufacturing facilities and share production equipment. under the following guidelines: e Variable expenses are directly assigned to the division that incurs them Traceable fixed overhead expenses are directly assigned to the division that incurs thenm PWC's budget for the year ending December 31 follows; it was prepared on a business unit basis e Common fixed expenses are allocated to the divisions on the basis of units produced, which bears a close relationship to direct labor. Included in common fixed expenses are costs of the corporate staff, legal expenses, taxes, marketing staff, and advertising. The company plans to manufacture 8,000 upscale fixtures, 22,000 mid-range fixtures, and 20,000 electronic timing devices during the year. PITTSBURGH-WALSH COMPANY, INC Budget For the Year Ending December 31 (amounts in thousands) Electronic Timing Devices Lighting Fixtures Lighting Fixtures Mid-Range Upscale $1,440 Totals Sales Variable expenses $770 $3,010 720 170 S 550 140 Cost of goods sold Selling and admin. Contribution margin Fixed overhead Divisional contribution Common fixed expenses 439 $271 $191 60 $420 80 $340 1,479 290 $1,241 300 S 941 60 80 120 28 $192 48 Overhead Selling and admin. 132 31 $ 28 300 70 S 571 Operating Income S 351