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

Requirements
1. Complete the performance evaluation report for the subunit (round to three decimal places).
2. Based on the data presented, what type of responsibility center 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 14% (both criteria must be met)?
4. Should only unfavorable 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. List 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.

Transcribed Image Text:

Carolina Sports Manufacturing Company–Water Sports Subunit Monthly Performance Report For the Month Budgeted Variance Percentage* Actual Varjance* 486,000 $ 450,000 6 Sales 7 Less: Variable expenses 8 Contribution margin 260,000 2$ 226,000 S 200,000 50,000 150,000 25,000 125,000 9 Less: Direct fixed expenses 10 Segment margin 11 Less: Common fixed expenses 174,000 S Öperating Income 13 139,000 $