Please give me 2 different answers. Attached are the 3 pages.

Please review the content covering the Balanced Scorecard approach on pages 337 - 338 and on page 340. How can manager use the four perspectives to better manage their company? Why is the approach preferable to simply managing by "the numbers and relying solely on financial data? do you think it would be hard to institute such an approach? Part A The Media division of a company reports income of $600,000, average assets of $7,500,000, and a target income of 6% of average assets. Compute the division's (a) return on investment and (b) residual income. Solution a. $600,000/$7,500,000 = 8% b. $600,000 - ($7,500,000 x 6%) = $150,000 Part B A division reports sales of $50,000, income of $2,000, and average assets of $10,000. Compute the division's (a) profit margin, (b) investment turnover, and (c) return on investment. Solution a. $2,000/$50,000 = 4% b. $50,000/$10,000 = 5.0 e. $2,000/$10,000 = 20% Point: A survey found that nearly 60% of global companies use some form of balanced Scorecard. EXHIBIT 9.17 Balanced Scorecard Performance Indicators ROI Employee Training Cost control Sustainability New products M. - Customer Internal Processes Innovation/Learning Financial Net income . ROI Customer satisfaction rating # of new customers % of on-time deliveries % of sales from new products Time to fill orders . Defect rates Cycle time Product costs Labor hours per order Accident-free days Warranty claims Employee satisfaction Employee turnover $ spent on training # of new products # of patents $ spent on research . Sales growth Profit margin Residual income % of sales returned . Investment turnover Page 338 After selecting KPIs, companies collect data on each indicator and compare actual amounts to target (goal) amounts. For example, a company might have a goal of filling 98% of customer orders within two hours. Results on this KPI help division managers in improving order fulfillment. Exhibit 9.18 is an example of balanced Scorecard reporting on the customer perspective for a retailer. This scorecard reports that 1.2% of all orders are returned. The color of the circles in the Signal column reveals whether the company is beating its goal (green), meeting its goal (gray), or not meeting its goal (red). The retailer is meeting or exceeding its goals on orders returned and customer satisfaction. However, the company received more customer complaints than was hoped for. A manager would combine this information with information from other performance indicators to improve customer service. EXHIBIT 9.18 Balanced Scorecard Reporting: Retailer KPI: Customer Perspective Actual Goal Signal Orders returned 1.2% 2% Customer satisfaction rating 9.5 of 10.0 9.5 Number of customer complaints 142 100 Transfer Pricing Used by Companies Cost-Based 46% Market-Based 37% Negotiated 17% With excess capacity, division managers often negotiate a transfer price between variable cost per unit and market price per unit. Page 340 The negotiated transfer price and resulting departmental performance reports reflect, in part, the negotiating skills of the respective division managers. This might not be best for overall company performance. Determining the transfer price under excess capacity is complex and is covered in advanced courses. This chapter focused on performance measurement and reporting. Companies report on their sustainability performance in a variety of ways. One approach integrates sustainability metrics in the four balanced scorecard perspectives (customer, internal process, innovation and learning, and financial). Many key performance indicators address the internal process and innovation and learning perspectives. For example, General Mills reports on its environmental targets and progress in its annual corporate sustainability report. Exhibit 9.19 captures how this information might appear as part of a balanced scorecard report. EXHIBIT 9.19 Balanced Scorecard-Sustainability KPI: Internal Process Perspective Actual Reduction Goal Reduction Signal Emissions 23% 20% Energy usage 10% 20% Solid waste 38% 50% Fuel 25% 35% Please review the content covering the Balanced Scorecard approach on pages 337 - 338 and on page 340. How can manager use the four perspectives to better manage their company? Why is the approach preferable to simply managing by "the numbers and relying solely on financial data? do you think it would be hard to institute such an approach? Part A The Media division of a company reports income of $600,000, average assets of $7,500,000, and a target income of 6% of average assets. Compute the division's (a) return on investment and (b) residual income. Solution a. $600,000/$7,500,000 = 8% b. $600,000 - ($7,500,000 x 6%) = $150,000 Part B A division reports sales of $50,000, income of $2,000, and average assets of $10,000. Compute the division's (a) profit margin, (b) investment turnover, and (c) return on investment. Solution a. $2,000/$50,000 = 4% b. $50,000/$10,000 = 5.0 e. $2,000/$10,000 = 20% Point: A survey found that nearly 60% of global companies use some form of balanced Scorecard. EXHIBIT 9.17 Balanced Scorecard Performance Indicators ROI Employee Training Cost control Sustainability New products M. - Customer Internal Processes Innovation/Learning Financial Net income . ROI Customer satisfaction rating # of new customers % of on-time deliveries % of sales from new products Time to fill orders . Defect rates Cycle time Product costs Labor hours per order Accident-free days Warranty claims Employee satisfaction Employee turnover $ spent on training # of new products # of patents $ spent on research . Sales growth Profit margin Residual income % of sales returned . Investment turnover Page 338 After selecting KPIs, companies collect data on each indicator and compare actual amounts to target (goal) amounts. For example, a company might have a goal of filling 98% of customer orders within two hours. Results on this KPI help division managers in improving order fulfillment. Exhibit 9.18 is an example of balanced Scorecard reporting on the customer perspective for a retailer. This scorecard reports that 1.2% of all orders are returned. The color of the circles in the Signal column reveals whether the company is beating its goal (green), meeting its goal (gray), or not meeting its goal (red). The retailer is meeting or exceeding its goals on orders returned and customer satisfaction. However, the company received more customer complaints than was hoped for. A manager would combine this information with information from other performance indicators to improve customer service. EXHIBIT 9.18 Balanced Scorecard Reporting: Retailer KPI: Customer Perspective Actual Goal Signal Orders returned 1.2% 2% Customer satisfaction rating 9.5 of 10.0 9.5 Number of customer complaints 142 100 Transfer Pricing Used by Companies Cost-Based 46% Market-Based 37% Negotiated 17% With excess capacity, division managers often negotiate a transfer price between variable cost per unit and market price per unit. Page 340 The negotiated transfer price and resulting departmental performance reports reflect, in part, the negotiating skills of the respective division managers. This might not be best for overall company performance. Determining the transfer price under excess capacity is complex and is covered in advanced courses. This chapter focused on performance measurement and reporting. Companies report on their sustainability performance in a variety of ways. One approach integrates sustainability metrics in the four balanced scorecard perspectives (customer, internal process, innovation and learning, and financial). Many key performance indicators address the internal process and innovation and learning perspectives. For example, General Mills reports on its environmental targets and progress in its annual corporate sustainability report. Exhibit 9.19 captures how this information might appear as part of a balanced scorecard report. EXHIBIT 9.19 Balanced Scorecard-Sustainability KPI: Internal Process Perspective Actual Reduction Goal Reduction Signal Emissions 23% 20% Energy usage 10% 20% Solid waste 38% 50% Fuel 25% 35%