Chemical Bank : Implementing the Balanced Scorecard Submitted By : Group 12 KUSHAL KISLAY FT151093 MEHUL JAIN FT152088 SIDDHARTHA PAUL FT154003 VIVEK KHATTAR FT154063 JAYANTH SATHEESH FT152025 Background • Chemical Banking Corporation was performing a radical organizational transformation into a marketfocused and customer-focused organization after the 1991 merger with the Manufacturers Hanover Corporation. • Shift its image from a narrow provider of traditional financial services to a broader
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Chemical Banks – Allocation of Profits Question 1. How will you resolve the due bill controversy? Due Bill Controversy: Metro Division’s service to sell the Due Bill for the Treasury division is not recognized by the Treasury department. While Metro acted like a cost center‚ Treasury acted as profit center. When Metro Bank division reviewed the profit loss statement for the Due Bills‚ it was found that Metro division was incurring loss of $26.50 for each transaction. Consequences of Due
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the unfair headquarters’ overhead cost allocation method of Korea insurance company. There are concerns towards the system by a manager. And that lead to reduce on net income of branches. Jin Kim is trying to develop more efficient systems. The reading text is about the headquarters’ cost allocation method of Korea insurance Co. Inc. Jin Kim‚ manager of the company‚ accused that the costing systems is inefficient as it leads to decrease in incremental cost inappropriately and discourages employees
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allocate service department costs to “production” or user departments‚ and ultimately to the products and services that they provide. For example‚ hospitals use sophisticated methods for allocating costs of service departments such as Housekeeping‚ Patient Admissions‚ and Medical Records to patient wards and outpatient services‚ and then to individual patients. Historically‚ these allocations were important to hospitals because Medicare reimbursement was based on actual costs. To the extent that the
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Joint-cost allocation. Elsie Dairy Products Corp. buys one input‚ full-cream milk‚ and refines it in a churning process. From each gallon of milk Elsie produces three cups of butter and nine cups of buttermilk. During May 2010‚ Elsie bought 12‚000 gallons of milk for $22‚250. Elsie spent another $9‚430 on the churning process to separate the milk into butter and buttermilk. Butter could be sold immediately for $2.20 per pound and buttermilk could be sold immediately for $1.20 per quart (note: two
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allocate costs? How do companies allocate costs? And how this cost allocation can affect the decision making of the company. It is important for the companies to find the proper method to allocate the costs. Cost allocation is an important issue in many companies because many of the costs associated with designing‚ producing and distributing products and services are not easily identified with the products and services that are created. It would have been easier for companies to allocate cost if costs
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Cost Allocation at Water Purification Group Mary May pushed the door to her office thinking about her plan to enrol her daughter for a medical degree at a private university. The private university is the only institution of higher learning that her daughter can apply for‚ considering her high school results. Mary sat down at her table and a smile came to her lips. Her financial situation will definitely improve after the company‚ Bio-Organics‚ announce this year’s bonuses. Project ORG7 she
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Case 1: Chemical Bank: Implementing the Balanced Scorecard see page 233-252 Questions for the case: 1. What does Mike Hegarty want to accomplish with the BSC ? 2. Comment on the BSC implementation at Chemical’s Retail Bank ? 3. What pitfalls need to be avoided for a successful BSC project? Balanced Scorecard Implementation Pitfalls to Avoid There are many Balanced Scorecard implementations where companies don ’t seem to get all the benefits described above. Research and experience have
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D.‚ CPA‚ CMA‚ INTRODUCTION In the past‚ bank accountants paid little or no attention to the use of managerial accounting concepts in the banking industry. Viewing managerial accounting from the perspective of the banking industry provides a unique opportunity to explore the development of the internal reporting structure. While the use of internal cost and profitabiHty reports is widespread in merchandising‚ manufacturing‚ and other service industries‚ banks have historically focused only on overall
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Harvard Business School CHEMICAL BANK Allocation of profits Chemical Bank Sixth Largest U.S. commercial bank in 1983 With 20‚000 employees Having $ 46.9 billion in assets Offered a broad range of financial services throughout the world. Major Profit centres Chemical Bank Personal and Banking Services group World banking Group Treasury Group Areas involved in Due bills controversy Personal and Banking Services group Metropolita n Division Trust and Investment Division Treasury Group
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