What are the advantages and disadvantages of setting a

Reference no: EM13482532

Spruce Enterprises operates a chain of lumber stores. In 2008, corporate management examined industry-level data anddetermined the following performance targets for lumber retailstores:

Assets turnover 1.7

Profit margin 80%

The actual 2008 results for the company's lumber retailstores follow:

Total assets at beginning ofyear $10,200,000

Total assets at end ofyear 12,300,000

Sales 28,250,000

Operatingexpenses 25,885,000

a. For 2008, how did thelumber retail stores perform relative to their industry norms?

b. Where, as indicated by theperformance measures, are the most likely areas to improveperformance in the retail lumber stores?

c. What are the advantages and disadvantages of setting a performance target at the start ofthe year compared with one that is determined at the end of theyear based on actual industry performance?

Reference no: EM13482532

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