Question $4(25$ marks$)$

Border Gin $($since Year $1)$ operates a private distillery and makes $6$ different types of gin. Below is data for Years $6$ and $7.$

$$Year $6$ Year $7$

Bottles manufactured

$262,500$

$300,000$

Bottles broken or lost

$1,875$

$1,000$

Bottles sold

$260,625$

$299,000$

Average selling price

$ $35\mathrm{.}00$

$ $36\mathrm{.}25$

Average cost

$ $8\mathrm{.}75$

$ $9\mathrm{.}69$

Maximum customer capacity

$6,250$

$6,250$

Cost to service customers

$ $1,500,000$

$ $1,531,250$

Cost per customer

$ $300$

$ $306$

Distillery staff

$6$

$6$

Distillery staff costs

$ $262,500$

$ $275,000$

$$TheAverage cost per bottle incorporates broken$/$lost bottles.

Required

Calculate Border Gin$$s operating income for Year $6$ and Year $7.$ You can round each line total to the nearest dollar. $(12$ marks$)$Is their overall strategy one of value or cost leadership? Explain. $(4$ marks$)$

Describe the key elements that Border Gin should include in its balanced score card and explain your reasons. Discuss each element of the balanced scorecard in a separate paragraph. $(9$ marks$)$