urphy Company mangers received the following incomplete performance report:
Murphy Company
Flexible Budget Performance Report
For the Year Ended July 31, 2018
| Actual Results | Flexible Bud. Variance | Flexible Budget | Sales Volume Variance | Static Budget | ||
| Units | 35,00 | (a) | 35,000 | 5,000 | F | (g) |
| Sales Revenue | $219,00 | (b) | 219,000 | 27,000 | F | (h) |
| Variable Expenses | 85,000 | (c) | 84,000 | 13,000 | U | (i) |
| Contribution Margin | 134,000 | (d) | 135,000 | 14,000 | F | (j) |
| Fixed Expenses | 105,000 | (e) | 100,000 | 0 | (k) | |
| Operating Income | 29,000 | (f) | 35,000 | 14,000 | F | (l) |
Complete the performance report. Identify the employee group that may deserve praise and the group that may be subject o criticism. Give your reasoning.
The Murphy Company’s performance report for the year ended July 31, 2018, presents a comprehensive analysis of its actual results compared to both the flexible budget and the static budget. This report serves as a crucial tool in evaluating the company’s performance, identifying areas of improvement, and recognizing employee groups that have contributed positively or may require further attention. In this essay, we will complete the performance report, discuss the potential praise-worthy employee group, as well as the group that might be subject to criticism, providing sound reasoning for each assessment.
The performance report provides a breakdown of various financial aspects, including sales revenue, variable expenses, contribution margin, fixed expenses, and operating income. Let’s proceed to complete the missing values and calculate the variances:
Actual Results | Flexible Budget | Variance
Sales Volume Variance:
Units: 35,000 (a) | 35,000 | 0
Sales Revenue: $219,000 (b) | $219,000 | $27,000 F (g)
Variable Expenses: $85,000 (c) | $84,000 | $13,000 U (i)
Contribution Margin: $134,000 (d) | $135,000 | $14,000 F (j)
Fixed Expenses: $105,000 (e) | $100,000 | $5,000 U (k)
Operating Income: $29,000 (f) | $35,000 | $6,000 F (l)
Upon analyzing the performance report, the sales team stands out as a praise-worthy employee group. Despite the unfavorable sales volume variance (0 units), they managed to achieve $27,000 more in sales revenue than anticipated. This suggests their efficiency in maximizing revenue from the existing sales volume. Their efforts indicate strong customer engagement, effective sales strategies, and possibly the development of new markets. By exceeding the static budget’s revenue projection, the sales team demonstrates their commitment and contribution to the company’s financial success.
The employee group that might be subject to criticism is the operations or production team. The unfavorable variance in variable expenses ($13,000 U) indicates potential inefficiencies in cost management during production processes. The variance could be attributed to factors such as material wastage, increased production costs, or inadequate control mechanisms. A higher-than-expected contribution margin variance ($14,000 F) suggests that the variable expenses could have been managed better. Addressing these issues is crucial for optimizing cost-efficiency, enhancing overall profitability, and ensuring the company’s long-term sustainability.
The completion of the Murphy Company’s performance report for the year ended July 31, 2018, allows us to evaluate its financial performance against the flexible and static budgets. The sales team’s ability to surpass revenue projections demonstrates their commendable efforts in revenue generation. However, the operations team’s unfavorable variable expenses variance highlights the need for improvements in cost control and production efficiency. By recognizing these praise-worthy and potentially critiqued employee groups, the company can leverage strengths and address weaknesses to drive future growth and success. Regular analysis of performance reports is essential for continuous improvement and informed decision-making.
As a renowned provider of the best writing services, we have selected unique features which we offer to our customers as their guarantees that will make your user experience stress-free.
Unlike other companies, our money-back guarantee ensures the safety of our customers' money. For whatever reason, the customer may request a refund; our support team assesses the ground on which the refund is requested and processes it instantly. However, our customers are lucky as they have the least chances to experience this as we are always prepared to serve you with the best.
Plagiarism is the worst academic offense that is highly punishable by all educational institutions. It's for this reason that Peachy Tutors does not condone any plagiarism. We use advanced plagiarism detection software that ensures there are no chances of similarity on your papers.
Sometimes your professor may be a little bit stubborn and needs some changes made on your paper, or you might need some customization done. All at your service, we will work on your revision till you are satisfied with the quality of work. All for Free!
We take our client's confidentiality as our highest priority; thus, we never share our client's information with third parties. Our company uses the standard encryption technology to store data and only uses trusted payment gateways.
Anytime you order your paper with us, be assured of the paper quality. Our tutors are highly skilled in researching and writing quality content that is relevant to the paper instructions and presented professionally. This makes us the best in the industry as our tutors can handle any type of paper despite its complexity.
Recent Comments