Requirements 1. Complete the performance evaluation report for the subunit (round to two decimal places). 2. Based on the data presented and your knowledge of the company, what type of responsibility center is this subunit? 3. Which items should be investigated if part of management's decision criteria is to investigate all variances equal to or exceeding $6,000 and exceeding 10% (both criteria must be met)? 4. Should only unfavorable variances be investigated? Explain. 5. Is it possible that the variances are due to a higher-than-expected sales volume? Explain. 6. Will management place equal weight on each of the variances exceeding $6,000? Explain. 7. Which balanced Scorecard perspective is being addressed through this performance report? In your opinion, is this performance report a lead or a lag indicator? Explain. 8. List one key performance indicator for the three other balanced Scorecard perspectives. Make sure to indicate which perspective is being addressed by the indicators you list. Subunit x Flexible Budget % Variance (F Variance (F or U) or U) Net Sales Revenue Variable Expenses Contribution Margin Traceable Fixed Expenses Divisional Segment Margin Actual Results Flexible Budget $ 473,000 $ 452,000 260,000 256,000 213,000 196,000 41,000 26,000 172,000 $ 170,000 $ One subunit of Racing Sports Company had the following financial results last month: Click the icon to view the financial results.) Read the requirements Requirement 1. Complete the performance evaluation report for the subunit. (Enter a variance for each account as a positive number and select whether the variance is favorable or unfavorable. Enter the variance percent as a percentage rounded to two decimal places, XXX%.) Actual Flexible Flexible Budget % Variance Subunit X Results Budget Variance (For U) (For U) Net Sales Revenue $ 473,000 $ 452,000 % Variable Expenses 260,000 256,000 % Contribution Margin $ 213,000 $ 196,000 % Traceable Fixed Expenses 41,000 26,000 170,000 Divisional Segment Margin $ 172,000 $ Requirement 2. Based on the data presented and your knowledge of the company, what type of responsibility center is this subunit? This performance report includes therefore, this subunit must be Requirement 3. Which items should be investigated if part of management's decision criteria is to investigate all variances equal to or exceeding $6,000 and exceeding 10% (both criteria must be met)? Management should investigate the following: (If an input field is not used in the table, leave the input field empty.) % % Requirement 4. Should only unfavorable variances be investigated? Explain. Managers should investigate Favorable expense variances Requirement 5. Is it possible that the variances are due to a higher-than-expected sales volume? Explain. The flexible budget variances due to sales volume differences between budget and actual. Differences in sales volume are captured by the The flexible budget variance is due to Requirement 6. Will management place equal weight on each of the variances exceeding $6,000? Explain Management will because Requirement 7. Which balanced Scorecard perspective is being addressed through this performance report? In your opinion, is this performance report a lead or a lag Indicator? Explain The performance report addresses the perspective of the balanced Scorecard. performance measures tend to be Indicators. They typically Requirement 8. List one key performance indicator for the three other balanced Scorecard perspectives. Make sure to indicate which perspective is being addressed by the indicators you list. Complete the following table to identify one key performance indicator for the three other balanced Scorecard perspectives. Balanced Scorecard Key performance perspective Indicator
