Cost Allocation and Responsibility accounting

Financial performance is measured in many ways. Requirements 1. Explain the difference between lag and lead indicators. 2. The following is a list of financial measures. Indicate whether each is a lag or lead indicator: . Income statement shows net income of $100,000 b. Listing of next week's orders of $50,000 C. Trend showing that average hits on the redesigned website are increasing at 5% per week d. Price sheet from vendor reflecting that cost per pound of sugar for the next month is $2 e . Contract signed last month with large retail store that guarantees a minimum shelf space for Grandpa's Overloaded Chocolate Cookies for the next year Incorrect: 0 Requirement 1. Explain the difference between lag and lead indicators. imilar to) (0/1) Lag indicators are performance measures that tend to reveal the results of past actions . They come after decisions and actions taken in the past . Lead indicators are performance measures that tend to indicate future performance . They come before, or drive, future performance Financial measures tend to be indicators. The financial results of a period Operational measures tend to be indicators. Current customer satisfaction ratings, defect rates, and on-time delivery rates . Management needs to know the results of past decisions, but it also needs to know how current decisions may affect the future. To adequately assess the company, managers need Click to select your answer(s) and then click Check