Financial and Managerial Accounting: E24-22 One subunit of Mountain Sports Company

Financial and Managerial Accounting
E24-22
One subunit of Mountain Sports Company had the following financial results last month:
Mountain - Subunit X Actual Flexible Flexible Budget Flexible Budget Variance (F or U) % Variance (F or U)
Direct Materials 28,500 26,400
Direct Labor 13,400 14,100
Indirect Labor 26,200 22,700
Utilities 12,100 11,100
Depreciation 26,000 26,000
Repairs and Maintenance 4,000 4,900
Total 110,200 105,200

Requirements
1. Complete the performance evaluation report for this subunit. Enter the variance percent as a percentage rounded 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 managements decision criteria is to investigate all variances exceeding $2,500 or 10%?
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 $2,500? 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.
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