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Report On Performance Benchmark | Management Accounting
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Added on 2020-02-14
Report On Performance Benchmark | Management Accounting
Added on 2020-02-14
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MANAGEMENTACCOUNTING ANDPERFORMANCEEVALUATUION
TABLE OF CONTENTS(1) Evaluation of proposal......................................................................................................32. Benefits and limitations of benchmarking and stating the ways through which thebenchmarking process can be improved.................................................................................6(3) Balance score card and its principles ...............................................................................84. Creation of the balance scorecard for Jonathan and Ingrid..............................................13CONCLUSION..............................................................................................................................15REFERENCES..............................................................................................................................16INDEX OF TABLESTable 1: Winston proposal...............................................................................................................3Table 2: Jonathan and Ingrid proposal.............................................................................................4
(1) Evaluation of proposalFor selecting most viable project for the firm following calculation is done.Winston proposalTable 1: Winston proposalInitial capital costStable conversion60000Fuel tank7000Fuel tank installationabove ground1500below ground12000Track preparation8000Quad bike350092000Annual revenue expenditureMaintenance of track5000Safety wear4000Food41250Alcohol48750Petrol11250Light and heat10000Staff salaries30000Other labor costCleaning22000Laundry8000Kitchen38000Rose garden15000233250Projected guests15Weeks in a year50Number of people per week0.3Charge1900Total revenue570Revenue per year28500Jonathan and Ingrid proposal
Table 2: Jonathan and Ingrid proposalInitial outlay2000Food3360Electricity336Domestic840Use of minibus1008Employees of contracts26500Garden maintenance charge200036044Total capacity for per day15Total capacity per week 105Occupancy rate80.00%Customers84Charge145Per week revenue12180Revenue per year609000If we look at the both projects it can be seen that project of Jonathan and Ingrid is viablethan Winston. In case of Winston, revenue is below investment amount. Whereas, in case ofJonathan and Ingrid, scene is different and revenue per year is much higher than cost. Hence, dueto this reason proposal of Jonathan and Ingrid is considered viable than same of Winston. In caseof Winston there are numerous costs and there is lack of equilibrium between cost and profit.There are four components of initial investment in case of Winston. These components are stableconversion, fuel tank, track preparation and quad bike purchase value per unit. Cost of stableconversion, fuel tank and track preparation is very high in the first year. On other hand, there isno chance of sharp elevation in number of customers for taking training on Quad bike. Due tothis reason, there is a heavy gap between cost and profit as well as computations are done usinginputs given in the case study proves this fact. However, cost of bike is relatively low butinfrastructure building cost is very high in this project. Due to this reason, cost is very high inthis project. On other hand, projection about the number of customers that will take service ofthis newly proposed entertainment facility is also very low. Due to this reason, projectedearnings nowhere stand near to the cost that will be incurred in the project if same is selected bythe firm.In case of Jonathan and Ingrid proposal scene is different and revenue is greater than thecost of the project. Its revenue is 609000 and cost is 36044. This fact clearly shows that this
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