28 Aug Using Accounting Information for Decision Making- Performance Report and the Balanced Scoreboard For this Assignment, you will continue in your role
Account for Management Decision Making
Week 2 Assignment
Using Accounting Information for Decision Making- Performance Report and the Balanced Scoreboard
For this Assignment, you will continue in your role of a consultant to provide information about using accounting information for decision making to a fictional organization so it can better prepare for the future. Last week, you submitted the first of two reports on financial information and budgeting. This week, you will submit the second report, which will focus on performance reports and balanced scorecards.
In addition to the requirements that follow, be sure to incorporate into your report references to appropriate academic sources, such as those found in this week’s Learning Resources or those in the Walden Library.
To prepare for this Assignment:
- Download Week 2 Part 1 Assignment Template.
- Download Week 2 Part 2 Assignment Template.
- Your instructor will provide part of the data to complete the calculations for this week’s Assignment. To access that information, refer to Doc Sharing.
Submit your completed business report and accompanying Excel file. Your report should be 3–5 pages in length (excluding title page and references) and should address the following:
Analyze the Performance Report- Preparing a Flexible Budget
For the first part of your report, you will examine a performance report based on the static budget about which the owners are very concerned. They feel that the unfavorable variances that are reflected in the report indicate an area that needs to be addressed, but they are looking to you for a better understanding and concurrence. To access this performance report, refer to the data that your Instructor provided in Doc Sharing for this week’s Assignment.
To complete this part, address the following:
- Using the Week 2 Part 2 Assignment Template and the data provided by your Instructor in the Doc Sharing area, prepare a performance report that includes a flexible budget.
- Note: In addition to submitting your work in Excel, you will insert your performance report into your main document.
- In your report, analyze why the original report was incorrect and explain the conclusion you reached based on the performance report.
- Then identify at least three questions regarding the performance report and include a rationale for why you asked each question.
The Balanced Scoreboard
One of the owners read recently that the balanced scorecard is a strategic-based performance management system and is wondering if it would be beneficial to implement a balanced scorecard approach. For the second part of your report, you will provide an analysis of how using the balanced scorecard can benefit the company. To complete this part, address the following:
- Explain how the balanced scorecard communicates strategy and provide examples.
- Examine the four quadrants on the balanced scorecard, how they are related, and what their impact is on financial performance.
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Week2LearningResources-AcctforMgmtDecisionMaking.docx
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WAL_MBAX_6050_Week02_Part1_assignmentTemplate1.docx
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WAL_MBAX_6050_Week02_Part2_assignmentTemplate1.xlsx
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USW1_WMBA_6050_Week01_Data_FallTerm-dd334dca-4daf-4461-adbc-154a905899b71.pdf
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USW1_WMBA_6050_Week02_Data_FallTerm-3bf00798-8f22-41ea-b3da-462d25c701d8.pdf
Account for Management Decision Making
Week 2 Learning Resources
Performance Report
Decision making must involve good data that is comparable to what is expected. For example, if a company’s budget is based on producing and selling 10,000 toys each month, but instead it produces and sells 15,000 toys in a specific month, it will probably have higher dollar sales as well as higher costs. If these actual data are compared to the budget for 10,000 toys, the sales department will be congratulated, and the production department might be in trouble for overspending. This misuse of data can be avoided by preparing a performance report in which the budget is adjusted for the increased sales.
· Franklin, M., Graybeal, P., & Cooper, D. (2019). 7.4 prepare flexible budgetsLinks to an external site. . In Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/7-4-prepare-flexible-budgets
· Franklin, M., Graybeal, P., & Cooper, D. (2019). 7.5 explain how budgets are used to evaluate goalsLinks to an external site. . In Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/7-5-explain-how-budgets-are-used-to-evaluate-goals
· Walden University, LLC. (2021). Preparing a performance report (flexible budget) [Video]. Walden University Canvas. https://waldenu.instructure.com
Balanced Scorecards
Many companies supplement quantitative measures with qualitative measures, also called nonfinancial measures, to better assess performance. One broad-based, nonfinancial measurement is the balanced scorecard. It links performance management with an organization's strategic goals and includes both financial as well as nonfinancial measures.
· Asiaei, K., & Bontis, N. (2019). Using a balanced scorecard to manage corporate social responsibilityLinks to an external site. . Knowledge & Process Management, 26 (4), 371–379. https://doi.org/10.1002/kpm.1616
· Franklin, M., Graybeal, P., & Cooper, D. (2019). Why it mattersLinks to an external site. . In Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/12-why-it-matters
· Franklin, M., Graybeal, P., & Cooper, D. (2019). 12.1 explain the importance of performance managementLinks to an external site. . In Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/12-1-explain-the-importance-of-performance-measurement
· Franklin, M., Graybeal, P., & Cooper, D. (2019). 12.2 identify the characteristics of an effective performance measureLinks to an external site. . In Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/12-2-identify-the-characteristics-of-an-effective-performance-measure
· Franklin, M., Graybeal, P., & Cooper, D. (2019). 12.4 describe the balanced scorecard and explain how it is usedLinks to an external site. . In Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/12-4-describe-the-balanced-scorecard-and-explain-how-it-is-used
· Quesado, P., Aibar, B., Lima, L. (2018). Advantages and contributions in the balanced scorecard implementationLinks to an external site. . Intangible Capital , 14 (1), 186–201. https://doi.org/10.3926/ic.1110
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Week 2 Assignment: Using Accounting Information for Decision Making— Performance Report and the Balanced Scorecard
Prepared by: Replace this text with your name.
Date: Replace this text with the submission date.
Walden University
MBAX 6050: Accounting for Management Decision Making
Analyzing the Performance Report—Preparing a Flexible Budget
Replace this text with introductory information. Add or remove headings as necessary.
[Heading]
Insert your performance report from Excel. Add or remove headings as necessary. For information on inserting data from Excel into Word, refer to the following: Microsoft. (n.d.). Insert a chart from an Excel spreadsheet into Word. https://support.microsoft.com/en-us/office/insert-a-chart-from-an-excel-spreadsheet-into-word-0b4d40a5-3544-4dcd-b28f-ba82a9b9f1e1
[Sub-Heading]
Replace or remove this text. Add or remove headings as necessary.
The Balanced Scorecard
Replace this text with introductory information. Add or remove headings as necessary.
[Heading]
Replace or remove this text. Add or remove headings as necessary.
[Sub-Heading]
Replace or remove this text. Add or remove headings as necessary.
References
[Please delete this note before submitting your Assignment. For more information about formatting your reference list, please visit the following site: https://academicguides.waldenu.edu/writingcenter/apa/references .]
Include appropriately formatted references to support your Assignment. Refer to the Assignment guidelines for further information on the requirements.
Page 5 of 15
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Part 3 – Performance Report
| Performance Report For month ending June 20xx | |||||||||
| I | II | III | IV | V | |||||
| Static Budget | Actual | Variance (II–I) | Favorable (F) or Unfavorable (U) | Flexible Budget | Variance (II–IV) | Favorable (F) or Unfavorable (U) | |||
| Manufacturing Overhead Costs | |||||||||
| Indirect Labor | $ – 0 | $ – 0 | |||||||
| Supplies | $ – 0 | $ – 0 | |||||||
| Utilities | $ – 0 | $ – 0 | |||||||
| Total | $ – 0 | $ – 0 | $ – 0 | $ – 0 | $ – 0 | ||||
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© 2022 Walden University, LLC Page 1 of 1
Week 1 Assignment Data
AMcarParts, Inc.
Income Statement For the Year Just Ended
Revenues $ 325,000,000 Operating Expenses Salaries and Wages
$ 175,000,000
Payroll taxes, etc. 70,000,000
Supplies 12,975,000
Delivery Fleet 5,020,000
Communications 525,000
Insurance 1,975,000
Office supplies 195,000
Miscellaneous Operating Income
1,835,000
267,525,000
57,475,000 Other Income/Expense Interest expense Income Before Income Taxes
1,980,000
55,495,000 Provision for Income Taxes Net Income
12,208,900
$ 43,286,100
Notes and Assumptions Change Percentage
1. Revenue is from selling after-market automotive parts. Increase 2%
2. Salaries are gross for all employees. Increase 2%
3. Payroll taxes are 40% of salaries and wages. No Change 0%
4. Supplies include raw materials, hardware, tools, etc. Increase 5%
5. Gas, maintenance, etc are for delivery vehicles. Increase 5%
6. Company communication plan. Increase 2%
7. Insurance is for liability, vehicles, and unemployment. Increase 10%
8. Office supplies include all supplies not associated with manufacturing. Increase 3%
9. Miscellaneous accounts for all other expenses not covered above. Increase 7%
10. Interest expense is for purchase of the delivery fleet. No Change 0%
11. Provision for income taxes is 22% No Change 0%
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© 2022 Walden University, LLC Page 1 of 1
Week 2 Assignment Data
AMcarParts, Inc.
Performance Report For month ending June 20xx
Budget
Actual
Variance
Favorable (F) or
Unfavorable (U)
Production in Number of Assemblies 50000.00 55000.00 -5000.00 F Costs: Indirect Labor $ 125,500.00 $ 130,600.00 $ 5,100.00 U Supplies $ 225,000.00 $ 239,750.00 $ 14,750.00 U Utilities $ 119,000.00 $ 131,500.00 $ 12,500.00 U
Total $ 469,500.00 $ 501,850.00 $ 32,350.00 U
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