Objectives 1, 2, 3 P-M:9-20A Integrating decentralization and performance evaluation systems One subunit of Racer Sports Company had the following financial results last month: 1. Sales $25,000 F % Variance Flexible Budget Variance (F or U) (F or U) Subunit X Actual Results Flexible Budget Net Sales Revenue $ 476,000 $ 451,000 Variable Expenses 261,000 251,000 Contribution Margin 215,000 200,000 Traceable Fixed Expenses 40,000 26,000 Divisional Segment Margin $ 175,000 $ 174,000 Requirements 1. Complete the performance evaluation report for this subunit (round to two decimal places). 2. Based on the data presented and your knowledge of the company, what type of responsibility center is this subunit? 3. Which items should be investigated if part of management's decision criteria is to investigate all variances equal to or exceeding $8,000 and exceeding 10% (both criteria must be met)? 4. Should only unfavorable variances be investigated? Explain.
Objectives 1, 2, 3 P-M:9-20A Integrating decentralization and performance evaluation systems One subunit of Racer Sports Company had the following financial results last month: 1. Sales $25,000 F % Variance Flexible Budget Variance (F or U) (F or U) Subunit X Actual Results Flexible Budget Net Sales Revenue $ 476,000 $ 451,000 Variable Expenses 261,000 251,000 Contribution Margin 215,000 200,000 Traceable Fixed Expenses 40,000 26,000 Divisional Segment Margin $ 175,000 $ 174,000 Requirements 1. Complete the performance evaluation report for this subunit (round to two decimal places). 2. Based on the data presented and your knowledge of the company, what type of responsibility center is this subunit? 3. Which items should be investigated if part of management's decision criteria is to investigate all variances equal to or exceeding $8,000 and exceeding 10% (both criteria must be met)? 4. Should only unfavorable variances be investigated? Explain.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Objectives 1, 2, 3 P-M:9-20A Integrating decentralization and performance evaluation systems
One subunit of Racer Sports Company had the following financial results last month:
1. Sales $25,000 F
Flexible Budget
Variance (F or U)
% Variance
Subunit X
Actual Results
Flexible Budget
(F or U)
Net Sales Revenue
$ 476,000
$ 451,000
Variable Expenses
261,000
251,000
Contribution Margin
215,000
200,000
Traceable Fixed Expenses
40,000
26,000
Divisional Segment Margin
$ 175,000
$ 174,000
Requirements
1. Complete the performance evaluation report for this subunit (round to two
decimal places).
2. Based on the data presented and your knowledge of the company, what type of
responsibility center is this subunit?
3. Which items should be investigated if part of management's decision criteria is
to investigate all variances equal to or exceeding $8,000 and exceeding 10% (both
criteria must be met)?
4. Should only unfavorable variances be investigated? Explain.
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