Respond to the required questions, double-spaced, APA format (source citations and reference insertions) essay (Each Question). In each Case Study, you must use at least three (3) references (in text), including the textbook (included below).
Textbook reference:
Managerial Accounting: Decision Making and Motivating Performance- Text Only: Datar, S.
M., & Rajan, M. V. (2014). Managerial accounting: making decisions and motivating performance.
Boston: Pearson. ISBN: 9780137024872
(This Assignment Box maybe linked to Turnitin.)
Respond to the required questions, double-spaced, APA format (source citations and reference insertions) essay (Each Question). In each Case Study, you must use at least three (3) references (in text), including the textbook (included below). Textbook reference: Managerial Accounting: Decision Making and Motivating Performance- Text Only: Datar, S. M., & Rajan, M. V. (2014). Managerial accounting: making decisions and motivating performance. Boston: Pearson. ISBN: 9780137024872 (This Assignment Box maybe linked to Turnitin.) 125 Words (Bakari Miller) – Reply and Comment on the following: According to the text, the budget is a proposed plan of action by management for a specified period (Datar & Rajan, 2014, p. 484). Budgets take into account data from past performance, alongside current and predicted internal and external conditions, such as revenue stream levels and the availability of raw materials like oil, respectively (Gartenstein, 2019). These factors are used to forecast and determine targets for a company. Based on the budget managers can obtain a clear objective that they need to see through, and an incentive to do well. It is proven that employees are motivated to work harder to avoid failure; falling short of budgeted numbers (Datar & Rajan, 2014, p. 487). An example of this is a manager ensuring that they and their staff reach monthly sale quotas. Moreover budgets are a better means of judging management over past performance because past performance results can contain skewed data that is unique to that time period and may not hold true to current or future company circumstances (Datar & Rajan, 2014, p. 486) In my opinion budgeted performance is a better criterion than past performance for evaluating managers due to the fact that they would be more motivated to achieve a budgeted target, while on the other hand they can be lax if they knew they were being evaluated based on past performance targets they have already received. Additionally, this can breed a culture of complacency that would do a company no good. Furthermore, miscued data from past performance can result in inaccurate evaluations of managers so it would be better to use budgeted performance as the criterion so because managers would then be evaluated based on budget to actuals. The budgeted targets are usually harder but achievable so evaluations can be more accurate and fair. 125 Words (Jonathan Chan Jon Chu) – Reply and Comment on the following: "Budgeted performance is a better criterion than past performance for judging managers." Do you agree? Explain with appropriate examples. I’m inclined to agree with this but I’m a proponent of the thought of them being helpful. In my opinion, budgeted performance is certainly a better criterion due to the fact that markets and prices change frequently. We can also say, future predictions are more helpful than past occurrences. The performance budget helps in taking better financial decisions for the allocation of resources. It reviews the operational efficiency of the projects. Hence, one can say, it links the entire process of planning, implanting, and evaluation of the results. (EFinanceManagement, n.d.) Performance budgets play pivotal roles such as setting accountability and ensuring there’s a clear purpose. The only downfall I can imagine is the subjectivity to the budget. When budgeting and taking a conservative approach, management may think accountants are overbudgeting and that funds can be allocated elsewhere. I think once the budget has a strong sense of accounting and background work done it’s certainly a safer bet than past performance reports. The past is exactly what it’s referred to, the past. The accounting analysis uses past statistics across historical time periods for a single company, for example, the last 5 years (Ready Ratios, n.d.). This may work for other areas of business, but not accounting. Perhaps we can form trends on percentage increases but even then, it’s only an assumption. It’s a good starting point but by no means would it trump budget performance. Respond to the required questions, double-spaced, APA format (source citations and reference insertions) essay (Each Question). In each Case Study, you must use at least three (3) references (in text), including the textbook (included below). Textbook reference: Managerial Accounting: Decision Making and Motivating Performance- Text Only: Datar, S. M., & Rajan, M. V. (2014). Managerial accounting: making decisions and motivating performance. Boston: Pearson. ISBN: 9780137024872 (This Assignment Box maybe linked to Turnitin.) 125 Words (Bakari Miller) – Reply and Comment on the following: According to the text, the budget is a proposed plan of action by management for a specified period (Datar & Rajan, 2014, p. 484). Budgets take into account data from past performance, alongside current and predicted internal and external conditions, such as revenue stream levels and the availability of raw materials like oil, respectively (Gartenstein, 2019). These factors are used to forecast and determine targets for a company. Based on the budget managers can obtain a clear objective that they need to see through, and an incentive to do well. It is proven that employees are motivated to work harder to avoid failure; falling short of budgeted numbers (Datar & Rajan, 2014, p. 487). An example of this is a manager ensuring that they and their staff reach monthly sale quotas. Moreover budgets are a better means of judging management over past performance because past performance results can contain skewed data that is unique to that time period and may not hold true to current or future company circumstances (Datar & Rajan, 2014, p. 486) In my opinion budgeted performance is a better criterion than past performance for evaluating managers due to the fact that they would be more motivated to achieve a budgeted target, while on the other hand they can be lax if they knew they were being evaluated based on past performance targets they have already received. Additionally, this can breed a culture of complacency that would do a company no good. Furthermore, miscued data from past performance can result in inaccurate evaluations of managers so it would be better to use budgeted performance as the criterion so because managers would then be evaluated based on budget to actuals. The budgeted targets are usually harder but achievable so evaluations can be more accurate and fair. 125 Words (Jonathan Chan Jon Chu) – Reply and Comment on the following: "Budgeted performance is a better criterion than past performance for judging managers." Do you agree? Explain with appropriate examples. I’m inclined to agree with this but I’m a proponent of the thought of them being helpful. In my opinion, budgeted performance is certainly a better criterion due to the fact that markets and prices change frequently. We can also say, future predictions are more helpful than past occurrences. The performance budget helps in taking better financial decisions for the allocation of resources. It reviews the operational efficiency of the projects. Hence, one can say, it links the entire process of planning, implanting, and evaluation of the results. (EFinanceManagement, n.d.) Performance budgets play pivotal roles such as setting accountability and ensuring there’s a clear purpose. The only downfall I can imagine is the subjectivity to the budget. When budgeting and taking a conservative approach, management may think accountants are overbudgeting and that funds can be allocated elsewhere. I think once the budget has a strong sense of accounting and background work done it’s certainly a safer bet than past performance reports. The past is exactly what it’s referred to, the past. The accounting analysis uses past statistics across historical time periods for a single company, for example, the last 5 years (Ready Ratios, n.d.). This may work for other areas of business, but not accounting. Perhaps we can form trends on percentage increases but even then, it’s only an assumption. It’s a good starting point but by no means would it trump budget performance.