Question

Measure maps

Moses Moonrocks Inc. has developed a balanced scorecard with a measure map that suggests that the number of erroneous shipments has a direct effect on operating profit. The company estimates that every shipment error leads to a reduction of revenue by $3,000 and increased costs of about $2,000.

Sales	$230,000
Cost of goods sold	150,000
Depreciation expense	30,000
Other expenses	20,000

If the company has the above budgeted sales and costs for next month (without accounting for any possible shipping errors), determine how many shipping errors the company can afford to have and still break even.

Break-even shipping errors

Answer 1

Answer - calculation of net income sales = $ 230,000 lexs:- cost of goodid = ($ 150,000) - ($30,000) bepreciation expense ($20,000) other expense $ 30,000 Net income B calculation of Break even for shipping enos! - Net income Break even - cost of shipping errors $ 30,000 2000 = 15 errow zx =