Case 10-2_Solartronics Inc

ase: 10-2(Solartronics, Inc.) Question1: Why are the reported results for January so poor, particularly in liht of the e!pected, a"erae #onthly profit of $%0,000& 'nser: In the su##aried inco#e state#ent shos that sales is 1*+,000 ut in udeted inco#e state#ent it as %000000122+0000 in a"erae #onthly. /n the other hand direct laor, "ariale o"erhead and fi!ed factory o"erhead ere unfa"orale ecause these ere hiher than those of udeted inco#e state#ent. Question2: What additional data ould e useful in analyin the fir#s January J anuary  perfor#ance& Why& 'nser: In udeted inco#e state#ent, /peratin "ariance such as direct laor, direct #aterial, "ariale factory o"erhead, fi!ed factory o"erhead-spendin, fi!ed factory o"erhead"olu#e ere not i"en accordin to #onthly. #onthly. If there are re"enue "ariance, sellin price "ariance, #i! and "olu#e "ariance, #i! "ariance, "olu#e "ariance, other re"enue analysis, #aret share "ariance, industry "olu#e "ariance, e!pense "ariance in the analysis state#ent i"en then it ould  e useful data for analyin the fir#s January perfor#ance ecause these data can infor# us the difference eteen the re"enue and e!penses. alanced Scorecard asics 3he alanced scorecard is a strateic plannin and #anae#ent syste# that is used e!tensi"ely in usiness and industry, o"ern#ent, o"ern#ent, and nonprofit oraniations orldide to alin  usiness

acti"ities to the "ision and stratey of the oraniation, i#pro"e internal and e!ternal co##unications, and #onitor oraniation perfor#ance aainst strateic oals. It as oriinated  y 4rs. 5oert 6aplan (7ar"ard usiness School) and 4a"id 8orton as a perfor#ance #easure#ent fra#eor that added strateic non-financial perfor#ance #easures to traditional financial #etrics to i"e #anaers and e!ecuti"es a #ore alanced "ie of oraniational  perfor#ance. While the phrase alanced scorecard as coined in the early 1990s, the roots of the this type of approach are deep, and include the pioneerin or of eneral ;lectric on  perfor#ance #easure#ent reportin in the 19+0s and the or of ?uot@dashoard>?uot@ of perfor#ance #easures) in the early part of the 20th century. >?uot@3he alanced scorecard retains traditional financial #easures. ut financial #easures tell the story of past e"ents, an ade?uate story for industrial ae co#panies for hich in"est#ents in lon-ter# capailities and custo#er relationships ere not critical for success. 3hese financial #easures are inade?uate, hoe"er, for uidin and e"aluatin the Aourney that infor#ation ae co#panies #ust #ae to create future "alue throuh in"est#ent in custo#ers, suppliers, e#ployees, processes, technoloy, and inno"ation.>?uot@ 'dapted fro# 5oert S. 6aplan and 4a"id B. 8orton, >?uot@Csin the alanced Scorecard as a Strateic Danae#ent Syste#,>?uot@ 7ar"ard usiness 5e"ie (January-