Measure maps Measure maps

Moses Moonrocks Inc. has developed a balanced scorecard with a measure map

that suggests that the number of erroneous shipments has a direct effect on

operating profit. The company estimates that every shipment error leads to a

reduction of revenue by $$5,760$ and increased costs of about $$3,840.$

If the company has the above budgeted sales and costs for next month $($without

accounting for any possible shipping errors$),$ determine how many shipping errors

the company can afford to have and still break even.

Break$-$even shipping errors

Moses Moonrocks Inc. has developed a balanced scorecard with a measure map that suggests that the number of erroneous shipments has a direct effect on operating profit. The company estimates that every shipment error leads to a reduction of revenue by $$5,760$ and increased costs of about $$3,840.$

Sales $$223,000$

Cost of goods sold $149,000$

Depreciation expense $16,000$

Other expenses $10,000$

If the company has the above budgeted sales and costs for next month $($without accounting for any possible shipping errors$),$ determine how many shipping errors the company can afford to have and still break even.

Break$-$even shipping errors fill in the blank $1$