The cost accountant for a medium-sized business has been asked to propose a new system of responsibility
Question:
The cost accountant for a medium-sized business has been asked to propose a new system of responsibility accounting. Ownership is looking for a balanced scorecard to use in performance evaluation. As part of the introductory material, including a summary of the company, product offerings, marketplace, and competition. For this company, please describe a balanced scorecard proposal that consists of the following:
- Pricing Decisions and Customer Profitability: Select a gross margin percentage for your company and a pricing strategy.
- Support Department Cost Allocation: describe two departments that require tracking, and present the target cost for those departments as a percentage of sales in total. explain the selected percentage and rationale.
- Support Department Cost Allocation: Please explain two departments that require tracking, and present the target cost for those departments as a percentage of sales in total. Explain the selected percentage and rationale.
- Spoilage, Rework, and Scrap: Indicate the expected percentage level of spoilage and rework for the company as a percentage of sales
Please explain a sample scorecard in a supporting table an executive summary of one page and a justification of each selection. Please explain an operational approach that represents a primary initiative to achieving the expected level of performance.
Cost Management A Strategic Emphasis
ISBN: 978-0077733773
7th edition
Authors: Edward Blocher, David Stout, Paul Juras, Gary Cokins