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Performance Evaluation and the Balanced Scorecard1BUS510 2011 CHMODULE 6Feb 19th20131.Complete and analyze a performance report.Profit centers are responsible for controlling costs and generating revenue. Thereforeperformance reports contain actual and budgeted information on both revenues and costs.In addition to the performance report. A cost center may be evaluated on KPI’s such a costper unit of output.Cost Center performance Reports - Cost center performance reports typically focus onthe flexible budget variance the difference between actual results and the flexible budget.Because the payroll processing department only incurs expenses and does not generaterevenue, it is classified as a cost center. Managers use management by exception to determine which variance in the performancereport are worth investigating .for example, management may investigate only thosevariances that exceed a certain dollar amount or a certain percentage of the budgeted figure. Smaller variances signal that operations are close to target and do not requiremanagements immediate attention. For example, in the cost center. As discussed