Accounting Question

Topic 4 DQ 2

Review Problem 6.34 in your textbook. Using the questions provided as a guide, explain how you think the performance report presented may impact the company. Please review the posts of your classmates before responding to Problem 6.34; discuss three weaknesses that are different than what your classmates’ posted, or provide a different explanation as to why the item poses a weakness.

To participate in follow up discussion, ask questions and post comments regarding classmates’ posts, or respond to follow-up questions posted by the instructor.

Please include proper citations in your discussion post. Points will be deducted if proper citations are not used.

Submitted on:

Feb 29, 2024, 6:37 PM

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Yetzamanie Cadena

Mar 4, 2024, 6:53 PM

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1. Identify at least three weaknesses in the June production performance report.

*Lacks comparison with any benchmarks or standards, making it difficult to assess whether the performance is good or bad. Without a benchmark, it’s challenging to determine if the variances are significant or within acceptable limits.

*Provides variances without any analysis or explanation behind the reasons for these discrepancies. This lack of insight hinders managers’ ability to identify the root causes of the issues and take corrective actions.

*Mainly focuses on financial aspects, such as revenue and expenses, neglecting operational metrics like production efficiency or quality. Without a holistic view of the division’s performance, managers may overlook critical areas needing improvement.

2. Discuss the behavioral implications of Sara’s remark to Ken.

*Ken might feel demotivated and defensive, as the comment implies his division’s performance is inadequate. This could reduce his morale and engagement with his work.

*Ken may start avoiding accountability or taking risks to avoid further criticism from Sara or upper management.

*Other managers witnessing this exchange may lose trust in Sara’s leadership and become disengaged, fearing similar public criticism.

3. Prepare a more informative production performance report for June to assist in the evaluation of Ken’s division.

*Compare actual performance with budgeted figures and industry benchmarks to provide context for the variances.

*Accompany each variance with an explanation, highlighting the key drivers behind the discrepancies. This analysis can help identify areas for improvement and guide corrective actions.

*Introduce operational metrics such as production efficiency, defect rates, or customer satisfaction scores to provide a comprehensive view of performance.

4. Discuss how your recommended changes in reporting are likely to affect Ken’s behavior.

The revised report provides Ken with a clearer understanding of his division’s performance, including areas of strength and opportunities for improvement. With detailed analysis and benchmarks, Ken can better identify areas needing attention and take proactive measures to address them. This transparency and guidance are likely to motivate Ken to work towards improving his division’s performance rather than feeling demotivated or defensive. Additionally, the focus on operational metrics emphasizes the importance of efficiency and quality, encouraging Ken to prioritize these aspects in his division’s operations. Overall, the revised report is expected to foster a more constructive and collaborative approach to performance management within the organization.

Davis C. E., & Davis E. (2020). Managerial Accounting, Enhanced eText (4th ed.). John Wiley & Sons. 

    ISBN-13: 978EEGRP40373