POA11e25 - Ch25 SE1 to SE3 PERFORMANCE MANAGEMENT AND...

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Unformatted text preview: Ch25 SE1 to SE3 PERFORMANCE MANAGEMENT AND EVALUATION Chapter 25, SE 1. 1. d 3. b 2. a 4. c Chapter 25, SE 2. 1. Profit center 2. Cost center 3. Revenue center 4. Investment center 5. Discretionary cost center Chapter 25, SE 3. 1. Not controllable 2. Controllable 3. Controllable 4. Not controllable 5. Not controllable CHAPTER 25 Solutions Ch25 SE4 Chapter 25, SE 4. Performance Report for Cost Center C Cost Center C For the Month Ended December 31 Actual Flexible Master Results Variance Budget Variance Budget Units produced 80 80 20 (U) 100 Center costs Direct materials $ 84 $ 4 (U) $ 80 $ 20 (F) $100 Direct labor 150 10 (F) 160 40 (F) 200 Variable overhead 260 20 (U) 240 60 (F) 300 Fixed overhead 270 20 (U) 250 0 250 Total cost $764 $34 (U) $730 $120 (F) $850 Performance measures Defect-free units to total produced 80% 10% (U) N/A N/A 90% Average throughput time per unit 11 minutes 1 minute (U) N/A N/A 10 minutes Ch25 SE5 Chapter 25, SE 5. Performance Report for Profit Center P Profit Center P For the Month Ended December 31 Actual Master Results Variance Budget Sales $140 $20 (F) $120 Controllable variable costs Variable cost of goods sold 25 10 (U) 15 Variable selling and administrative expenses 15 10 (U) 5 Contribution margin $100 $ 0 $100 Controllable fixed costs 40 20 (F) 60 Profit center operating income $ 60 $20 (F) $ 40 Performance measures Number of orders processed 50 20 (F) 30 Average daily sales $4.68 $0.68 (F) $4.00 Number of units sold 100 40 (F) 60 Ch25 SE6 to SE9 Chapter 25, SE 6. Subsidiary D Subsidiary V Sales $1,650 $2,840 Operating income $ 180 $ 210 Average assets invested $ 940 $1,250 Profit margin 10.91% 7.39% Asset turnover 1.76 times 2.27 times ROI 19.15% 16.80% * Rounded Chapter 25, SE 7. Subsidiary J Subsidiary K Sales $2,000 $2,000 Operating income $ 500 $ 800 Beginning assets invested $4,000 $ 500 Ending assets invested $6,000 $1,500 Average assets invested $5,000 $1,000 Profit margin 25% 40% Asset turnover 0.40 times 2 times ROI 10% 80% Chapter 25, SE 8. Subsidiary H Subsidiary F Sales $20,000 $25,000 Operating income $ 1,500 $ 800 Beginning assets invested $ 4,000 $ 500 Ending assets invested $ 6,000 $ 1,500 Average assets invested $ 5,000 $ 1,000 Desired ROI 20% 20% Residual income $ 500 $ 600 Chapter 25, SE 9. Subsidiary M Subsidiary N Sales $15,000 $18,000 After-tax operating income $ 1,000 $ 1,100 Total assets $ 4,000 $ 5,000 Current liabilities $ 1,000 $ 1,500 $ 3,000 $ 3,500 Cost of capital 15% 15% Economic value added $ 550 $ 575 Total assets current liabilities * Ch25 SE10 to E4 Chapter 25, SE 10. Performance Goal Objective Measure Target Customer To have successful Average number To increase the satisfaction fund-raising of dollars raised average donation campaigns per donor by 10 percent Customer To have faculty Number of To increase the num- satisfaction engage in cutting- publications per ber of publications edge research year per tenure- per faculty member by track faculty at least one per year...
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POA11e25 - Ch25 SE1 to SE3 PERFORMANCE MANAGEMENT AND...

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