Using Performance Reports to Inform Organizational Decisions
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Application: Using Performance Reports to Inform Organizational Decisions
Very often, managers are called upon to make decisions “by the numbers.” In this Assignment, you will sort through information provided from the fictitious Honey Bear Confections (HBC) organization in order to glean information you need to make decisions about productivity levels.
HBC is a small organization dedicated to making bear-shaped sweets with honey as a sugar substitute. You have just been promoted to a position as manager of the production department at Honey Bear Confections when your supervisor shows you the following report. She tells you to “get it fixed.” You suspect she is alluding to a problem with productivity and efficiency.
To prepare for this Assignment, begin by reviewing the information below. Additionally, you may find valuable information in your course text, especially Example 6-3.
Honey Bear Confections
Manufacturing Overhead Static Budget Report
For the Month Ended June 20XX
Budget Actual Variance (U of F)
Production in bags of candy 10,000 12,000 2,000F
Costs:
Indirect labor $26,000 $31,200 $5,200U
Supplies $25,000 $29,500 $4,500U
Utilities $19,000 $22,500 $3,500U
TOTAL $70,000 $83,200 $13,200U
The Assignment:
o Prepare a performance report using spreadsheet software, such as Excel.
o For the next section of this Application, please utilize a word processing software (such as Word) to complete the following:
o Write a short memo to your supervisor explaining your findings and your recommendations.
o In your memo, as part of your recommendations, take a position on the following: Do all the variances in this example need to be examined? Why or why not?
SAMPLE ANSWER
Memo
To: Supervisor HCB company
From: financial analyst
Date:
Dear sir/madam
Ref: PERFORMANCE REPORT
From the above information, it can be deduced that the company should follow the budgeted cost rather than use the actual cost.
Yours faithfully
The actual cost for the production of 10000 and 12000 variances should be considered because they bring loss to the company.
References
Brockett, A., & Rezaee, Z. (2013). Corporate sustainability: Integrating performance and reporting. Hoboken, N.J: Wiley. https://www.wiley.com/en-us/Corporate+Sustainability%3A+Integrating+Performance+and+Reporting-p-9781118122365
Vreeland, D., & Vreeland, A. (2013). Memos: The Vogue years, 1962-1971. New York: Rizzoli International Publications.
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