ACC 501 Module 4 Case

Module 4 Tips

Case 4: A flexible budget is given for a forecasted sales of $1,325,000. Fixed and variable costs are given. Fixed costs remain fixed. Variable costs change with sales. For example, if you have to calculate cost of sales for a forecasted sales of $1,400,000, it would be $210,000 + (1,400,000x40%) = $770,000. Remember the condition for the rent amount.

The above method can be used to prepare flexible budgets for (+) and (–) 10%. Remember the condition for the rent amount.

Take into account the proposed marketing expenses.

Prepare a one page short memo and explain the analysis as required by the assignment.

Essay: Essay question is simple. Please look beyond the generic websites such as Investopedia and Wikipedia. I encourage you use the university library and/or Google books. Credible references are required for a good grade.

SLP 4: Follow the bullet points. Suggest specific financial and non-financial performance measures for the managers and divisions of your SLP1 organization. Suggest how these performance measures sync with your organization’s goals. 

Module 4 - Background

BUDGETING, VARIANCE ANALYSIS, AND PERFORMANCE EVALUATIONS

Required Background Materials

Budgets and variance analysis are related topics. The first interactive video introduces terminology and concepts.

Flexible Budgets and Standard Costs. (2014). Pearson Learning Solutions, New York, NY. Retrieved from  http://www.pearsoncustom.com/mct-comprehensive/asset.php?isbn=1269879944&id=11649

Next is an interview with a CFO.

CFO Insights: Gary Cokins on Embracing Change. (2013, Oct. 31). [Videos]. Part I: https://www.youtube.com/watch?v=LG1jRXULpC0&index=6&list=PL_PvlGddtOgGkSwnLdl1p5CWr2wcVEZ95  Part II ( https://www.youtube.com/watch?v=SQuqreqcOgk&list=PL_PvlGddtOgGkSwnLdl1p5CWr2wcVEZ95&index=7 )

The next resources cover the material in more detail.

Martin, J. R. (n.d.) Management Accounting: Concepts, Techniques, and Controversial Issues - Chapter 13: Profit Analysis: An Overall Performance Evaluation. Retrieved from  http://maaw.info/Chapter13.htm

Walther, l. (2014). Chapter Twenty-One. Budgeting: Planning for Success. Retrieved from http://www.principlesofaccounting.com/

Walther, l. (2014). Chapter Twenty-Two. Tools for Enterprise Performance Evaluation. Retrieved from  http://www.principlesofaccounting.com/

Suggested Resources

Agrawal, N. (2010). Principles of Management Accounting. Budgetary Control. Chapter 5. Delhi, IND: Asian Books Pvt Ltd. Retrieved from the Trident Online Library.

Gjerde, Kathy A. Paulson and Hughes, Susan B. (2007). Tracking performance: when less is more Management Accounting Quarterly. Retrieved from http://www.imanet.org/PDFs/Public/MAQ/2007_Q4/2007MAQ_fall_hughes.pdf .

Khan, M. H., Halabi, A. K., Sartorius, K. 2011. The use of multiple performance measures and the balanced scorecard (BSC) in Bangladeshi firms. Journal of Accounting in Emerging Economies. Bingley: 2011. Vol. 1, Iss. 2; pg. 160.