Integrating decentralization and performance evaluation systemsOne subunit of Track Sports Company had the following financial results last month:RequirementsComplete the performance evaluation report for this subunit (round to two decimal places).Based on the data presented and your knowledge of the company, what type of responsibility center is this subunit?Which items should be investigated if part of management’s decision criteria is to investigate all variances equal to or exceeding $8,000 arm’ exceeding 10% (both criteria must be met)?Should only unfavorable variances be investigated? Explain.Is it possible that the variances are due to a higher-than-expected sales volume? Explain.Will management place equal weight on each of the variances exceeding $8,000? Explain.Which balanced scorecard perspective is being addressed through this performance report? In your opinion, is this performance report a lead or a lag indicator? Explain.List one key performance indicator for the three other balanced scorecard perspectives. Make sure to indicate which perspective is being addressed by the indicators you list. Flexible Budget% Variance(For U)Flexible Budget$ 455,000255,000200,000Subunit XActual ResultsVariance (F or U)Net Sales RevenueVariable ExpensesContribution MarginTraceable Fixed Expenses$ 474,000261,000213,00038,00029,000Divisional Segment Margin$ 175,000$ 171,000

1. Prepare the performance evaluation report:

Answered: Flexible Budget % Variance (For U)…

Managerial Accounting: The Cornerstone of Business Decision-Making

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ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter9: Profit Planning And Flexible Budgets

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Problem 62E: Flexible Budget for Various Levels of Production Budgeted amounts for the year: Required: 1. Prepare...

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Integrating decentralization and performance evaluation systems

One subunit of Track Sports Company had the following financial results last month:

Requirements

Complete the performance evaluation report for this subunit (round to two decimal places).
Based on the data presented and your knowledge of the company, what type of responsibility center is this subunit?
Which items should be investigated if part of management’s decision criteria is to investigate all variances equal to or exceeding $8,000 arm’ exceeding 10% (both criteria must be met)?
Should only unfavorable variances be investigated? Explain.
Is it possible that the variances are due to a higher-than-expected sales volume? Explain.
Will management place equal weight on each of the variances exceeding $8,000? Explain.
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.
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.

Flexible Budget
% Variance
(For U)
Flexible Budget
$ 455,000
255,000
200,000
Subunit X
Actual Results
Variance (F or U)
Net Sales Revenue
Variable Expenses
Contribution Margin
Traceable Fixed Expenses
$ 474,000
261,000
213,000
38,000
29,000
Divisional Segment Margin
$ 175,000
$ 171,000

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