Question

Direct or allocation of indirect costs to cost pools

Using volume based cost drivers.

Use diagrams and schedules wherever necessary and provide examples.

The Royal Botanical Gardens has been established for more than 120 years and has the following mission statement: "The Royal Botanical Gardens belongs to the nation. Our mission is to increase knowledge and appreciation of plants, their importance and their conservation, by managing and displaying living and preserved collections and through botanical and horticultural research." Located towards the edge of the city, the gardens are visited regularly throughout the year by many local families and are an internationally well known tourist attraction. Despite charging admission, it is one of the top five visitor attractions in the country. Every year it answers many thousands of inquiries from universities and research establishments, including pharmaceutical companies from all over the world and charges for advice and access to its collection. Inquiries include requests for access to the plant collection for horticultural work, seeds for propagation or samples for chemical analysis to seek novel pharmaceutical compounds for commercial exploitation. It receives an annual grant in aid from Central Government, which is fixed once every five years. The grant is due for review in three years' time. The finance director has decided that, in order to strengthen its case when meeting the government representatives to negotiate the grant, the management board should be able to present a balanced scorecard demonstrating the performance of the gardens. He has asked you, the senior management accountant, to help him. Many members of the board, which consists of eminent scientists, are unfamiliar with the concept of a balanced scorecard.

Required:

Strategic Map

Suitable balanced scorecard for the Royal Botanical Gardens and give examples of measures that would be incorporated within it. Marks

Answer 1

We should look at the detailed processes that the Royal Botanical Gardens could
present, as well as bearing in mind the organization from a monetary viewpoint.
There are three new viewpoints that businesses should contemplate:
Ø The customer perspective,
Ø The internal business perspective and
Ø The learning and growth perspective.
We should start the chore of emerging a balanced scorecard by observing at the
organization from all of these perspectives.
The customer perspective considers areas such as customer satisfaction and how the organization adds value to these customers. In the Royal Botanical Gardens' case this would comprise everyone who makes an investigation as well as all of its Visitors .The internal business perspective anticipates the internal processes that the organization needs to attain well in order to be successful. For the Royal Botanical Gardens these would contain the process it goes through to reply to a query from a university.
The learning and growth viewpoint cogitates areas that need continuous
improvement. For the Royal Botanical Gardens this would include staff training and investment in modern equipment. The organization could then look at a series of actions for each area stated in the mission statement. For example, one of the features was —showing living and conserved collections.
The balanced scorecard could turn these into specific measures:
Financial Perspective: Budget for the cost of adding new preserved collections.
Customer Perspective: Attractiveness of displays. Quality of information provided about displays.
Internal Business Perspective: Time spent on maintaining preserved collections.
Learning and growth Perspective: Number of new displays presented during the year.Number of visits made to overseas equivalents of the Royal Botanical Garden etc.