One subunit of Racer Sports Company had the following financial results last month:

Requirements
1. Complete the performance evaluation report for this subunit (round to three decimal places).
2. Based on the data presented, what type of responsibility centre is this subunit?
3. Which items should be investigated if part of management€™s decision criteria is to investigate all variances equal to or exceeding $10,000 and exceeding 10% (both criteria must be met)?
4. Should only unfavourable variances be investigated? Explain.
5. Is it possible that the variances are due to a higher-than-expected sales volume? Explain.
6. Do you think management will place equal weight on each of the $10,000 variances? Explain.
7. Which balanced scorecard perspective is being addressed through this performance report? In your opinion, is this performance report a lead or lag indicator? Explain.
8. Give one key performance indicator for the other three balanced scorecard perspectives. Indicate which perspective is being addressed by the indicators you list. Are they lead or lag indicators? Explain.

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Flexible Budget Percentage Flexible Variance Variance Racer-Subunit X Sales Actual Budget (U or F (U or $486,000 $450,000 260,000 250,000 Cost of goods sold. Operating expenses... Operating income before service 52,000 50,000 department charges...$174,000 $150,000 Service department charges (allocated)... 35,000 25,000 Operating income.. $139,000 $125,000