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Student Centre Managerial Accounting
5th Canadian Edition
Garrison/Noreen/Chesley/Carroll

Student Centre

Chapter 10: Standard Costs and the Balanced Scorecard

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    Group Exercises

    10-1. Each member of your group should be prepared to discuss a job which he or she has held. Discuss the job in terms of the standards expected of the employees. Areas could include:

    1. productivity (for a waiter or waitress: the number of tables served during a tour of duty; average check size; for an auto mechanic the volume of business during a day etc.)
    2. discuss the consequences of failure to conform to standards. Areas covered would include loss of income; probation, loss of job etc.
    3. Give your opinion and that of your fellow workers on the merits of these standards. Did these standards accomplish their goals? Were the standards practical or ideal?


    10-2. Standards are usually not discussed in the public sector. For the public sector, the balanced scorecard approach which consists of an integrated set of performance measures derived from the organization's strategy, and support of the company's strategy throughout the organization provide appropriate measures of performance.

    Your group should: Discuss how measures of performance such as the balanced scorecard would apply to the operation of a local police department. Arrive at some concrete measures of performance (see below). Several members of the group could visit one or more local police departments and discuss their goals with them in terms of measures of performance. Determine if they have quantifiable standards and if so, determine how success is measured.

    Areas to consider as measures of performance might include:

    1. emergency call response time
    2. is trend of crime down?
    3. is staffing based upon the times and days when the need for police protection is the greatest? Are staffing days and times periodically evaluated?
    4. Are crimes solved? What is the length of time required to arrest a perpetrator who is eventually convicted?
    5. Good police work requires police officers who are well conditioned. Is physical conditioning required of police officers? How are the physical conditioning rules enforced? Some of these standards are measurable, such as response time and categories of crimes over time. How are the standards enforced? In the past the public sector has been notoriously weak in monitoring standards.


    10-3. The August 11, 1997 issue of Forbes (pp. 70-72) described the operations of a leather furniture factory in Southern Italy. The theme of this article was the majority owner's rigid adherence to costs, and the use of computer technology to monitor costs and standards. Discuss the practicality of this model for other industrial and manufacturing concerns. Start by searching for another company(ies) which applies the same rigorous approach to the production process. A possible start would be local machine tool facilities. In the retail area, Wal-Mart has pioneered the use of computer control of inventory.


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