Accounting Sunk Costs and Balanced Scorecards
1. Your boss proclaims, "Not all future costs are relevant to business decisions, but costs are not relevant unless they occur in the future." Is your boss correct? Explain.
2. A balance scorecard's financial area focuses on how an organization adds value to shareholders. You currently work for a CPA firm and have two clients: a partnership and a church. Both organizations do not have shareholders. Even though a balanced scorecard is a vital tool for organizations, you do not consider the financial area relevant for your two clients. Is this a fair assessment? Does the type of organization impact the relevancy of a balanced scorecard's four components? Explain.