ACCA Strategic Professional · Advanced Performance Management · Management reports
Karlo Retail's board receives a monthly dashboard. Store managers complain that their reports include allocated head office costs of $400,000 that they cannot influence, and that their bonuses fall because of it. Which change best improves the usefulness of the store-level report for performance evaluation?
Separate controllable results from non-controllable allocated head office costs so managers are judged only on what they can influence. This gives fairer appraisal and better motivation. Allocating more cost or removing information would worsen accountability and feedback.
- AReport controllable results separately from non-controllable allocated costs, so managers are assessed on items they can influenceCorrect
- BRemove all cost information from the store reports
- CAllocate even more head office cost to stores to increase cost awareness
- DReport only to the board and stop reporting to stores
Explanation
Managers should be held accountable for controllable items. Separating controllable performance from allocated head office costs gives fairer evaluation and motivates managers. Adding more allocations worsens the problem, and removing costs or reporting removes useful feedback.
Did you get it right without looking?
One question tells you little. A timed set on Management reports shows your real accuracy, how long you take and where you lose marks.
More Management reports questions
- Halvern Ltd's report to regional managers shows only the current month's actual versus budget sales. A consultant criticises it for encourag…
- Orlin Ltd's sales report to the board states: 'Revenue rose 12% against budget.' It gives no explanation, and the sales director later revea…
- Zentra Foods plc reports to its board, to institutional investors and to the regional managers who run its stores. The finance director prop…
- Wexmoor Telecom has a model that identifies customers likely to cancel. The data team reports that customers who contacted the call centre t…
- Anselm Co is preparing an integrated management report for its board. Which of the following inclusions would most improve the report's abil…
- Brindle Foods' production director receives a report showing total factory overheads allocated from head office, including costs she cannot …