Week 2 Discussion- Account for Management Decision Making

Account for Management Decision Making

Week 2 Learning Resources

Performance Report

Decision making must involve good data that is comparable to what is expected. For example, if a company’s budget is based on producing and selling 10,000 toys each month, but instead it produces and sells 15,000 toys in a specific month, it will probably have higher dollar sales as well as higher costs. If these actual data are compared to the budget for 10,000 toys, the sales department will be congratulated, and the production department might be in trouble for overspending. This misuse of data can be avoided by preparing a performance report in which the budget is adjusted for the increased sales.

· Franklin, M., Graybeal, P., & Cooper, D. (2019).  7.4 prepare flexible budgetsLinks to an external site. . In  Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/7-4-prepare-flexible-budgets

· Franklin, M., Graybeal, P., & Cooper, D. (2019).  7.5 explain how budgets are used to evaluate goalsLinks to an external site. . In  Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/7-5-explain-how-budgets-are-used-to-evaluate-goals

· Walden University, LLC. (2021).  Preparing a performance report (flexible budget) [Video]. Walden University Canvas. https://waldenu.instructure.com

Balanced Scorecards

Many companies supplement quantitative measures with qualitative measures, also called nonfinancial measures, to better assess performance. One broad-based, nonfinancial measurement is the balanced scorecard. It links performance management with an organization's strategic goals and includes both financial as well as nonfinancial measures.

· Asiaei, K., & Bontis, N. (2019).  Using a balanced scorecard to manage corporate social responsibilityLinks to an external site. .  Knowledge & Process Management, 26 (4), 371–379. https://doi.org/10.1002/kpm.1616

· Franklin, M., Graybeal, P., & Cooper, D. (2019).  Why it mattersLinks to an external site. . In  Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/12-why-it-matters

· Franklin, M., Graybeal, P., & Cooper, D. (2019).  12.1 explain the importance of performance managementLinks to an external site. . In  Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/12-1-explain-the-importance-of-performance-measurement

· Franklin, M., Graybeal, P., & Cooper, D. (2019).  12.2 identify the characteristics of an effective performance measureLinks to an external site. . In  Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/12-2-identify-the-characteristics-of-an-effective-performance-measure

· Franklin, M., Graybeal, P., & Cooper, D. (2019).  12.4 describe the balanced scorecard and explain how it is usedLinks to an external site. . In  Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/12-4-describe-the-balanced-scorecard-and-explain-how-it-is-used

· Quesado, P., Aibar, B., Lima, L. (2018).  Advantages and contributions in the balanced scorecard implementationLinks to an external site. . Intangible Capital ,  14 (1), 186–201. https://doi.org/10.3926/ic.1110