tools-for-enterprise-performance-evaluation

Total variable exp 7 050000 3675000 5685000 16410000

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Unformatted text preview: d Cost Other Variable Exp. Total Variable Exp. $ 7 ,050,000 3,675,000 5,685,000 $16,410,000 $ 1,000,000 600,000 900,000 $2,500,000 $ 8 75,000 400,000 910,000 $2,185,000 $ 1,200,000 750,000 975,000 $2,925,000 $ 1,400,000 800,000 1,000,000 $3,200,000 $ 6 00,000 200,000 450,000 $1,250,000 $ 8 75,000 300,000 550,000 $1,725,000 $ 1,100,000 625,000 900,000 $2,625,000 $ *,334,850 3 1,241,100 $ 4,575,950 $ 4 75,000 175,000 $ 650,000 $ 4 58,850 131,100 $ 589,950 $ 5 26,500 234,000 $ 760,500 $ 6 40,000 224,000 $ 864,000 $ 3 37,500 112,500 $ 450,000 $ 2 93,250 207,000 $ 500,250 $ 6 03,750 157,500 $ 761,250 Contribution Margin Traceable Fixed Costs Location Margin $ 11,834,050 8,000,000 $ 3,834,050 $1,850,000 1,100,000 $ 750,000 $1,595,050 1,000,000 $ 595,050 $2,164,500 900,000 $ 1,264,500 $2,336,000 1,200,000 $ 1,136,000 $ 8 00,000 1,300,000 $ (500,000) $1,224,750 1,100,000 $ 124,750 $1,863,750 1,400,000 $ 463,750 Common Fixed Costs Stores Margin 1 ,500,000 $ 2,334,050 Continuing up the organizational chart, the VP of Operations will focus on summary data from store management, catering management, and procurement. Notice that the “stores” column (below) is derived from information found in the “combined” column (above). Again, note the presence of fixed costs that are not traceable to any specific operating segment ($1,300,000). Even though this cost is not assigned to a specific segment, it remains a cost for which the VP of Operations is responsible. Download free ebooks at bookboon.com 13 Responsibility Accounting and Management by Exception Tools for Enterprise Performance Evaluation P ERFORMANCE REPORT -- OPERATIONS FOR THE YEAR ENDING DECEMBER 31, 20X5 * Combined Stores Catering Procurement Total Sales $28,866,000 $16,410,000 $12,456,000 $ - Total Variable Expenses $ 6,942,590 $ 4,575,950 $ 2,366,640 $ - C ontribution Margin Less: Traceable Fixed Costs Unit Margin Less: Common Fixed Costs Operations Margin $ 21,923,410 1 7,700,000 $ 4,223,410 1 ,300,000 $ 2,923,410 $ 11,834,050 9,500,000 $ 2,334,050 $ 10,089,360 7,000,000 $ 3,089,360 $ 1 ,200,000 $(1,200,000) The next step in the corporate ladder is the CEO. This individual would most likely be evaluated on the overall financial statement outcomes. Although the CEO would have access to any and all of the reports from within the organization, they would mostly focus on the reports emanating from each vice president’s unit. 1.8 The Power of a Data Base System The static reports illustrated above are quite useful, but do suffer from an important limitation. Specifically, what you see is what you get. It is very difficult to “mine data” pertinent to a specific inquiry. For example, if the VP of Operations wanted to know the overall corporate sales mix proportions (hamburgers, fries, drinks) a specific request would be initiated to the store and catering managers. They would gather the individual reports from each location and develop a report to channel back up to the VP. The VP of Operations would then need to combine the two reports before having an answer to the inquiry. This is v...
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This note was uploaded on 06/07/2013 for the course BA 201 taught by Professor Cuongvu during the Fall '13 term at RMIT Vietnam.

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