Report: Cost Allocation, Balanced Scorecard, and Business Analysis

This report delves into two primary areas of management accounting: cost allocation methods and the balanced scorecard. It differentiates between the single-rate and dual-rate cost allocation methods, outlining their characteristics and applicability. The report highlights the advantages of the dual-rate method in providing more detailed and insightful information for decision-making, especially within businesses with diverse operations. Furthermore, it explores the balanced scorecard framework, discussing its four key perspectives: learning and growth, internal business processes, customer perspective, and financial. The report explains the interconnectedness of these perspectives and their importance in evaluating overall business performance. The student concludes by emphasizing the significance of measuring business progress to identify and address inefficiencies, ultimately enhancing business effectiveness. The report also references relevant academic sources to support its analysis.

Running head: MANAGEMENT 1
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MANAGEMENT 2
The differences between the single-rate method and dual-rate cost allocation method
The single-rate cost-allocation method uses only one cost rate across all departments or
divisions in the organization but dual -rate cost-allocation uses different cost rates contributed to
the different departments or divisions. Single rate method does not categorize the fixed costs and
variable costs in the cost pool but dual-rate method categorizes the costs into two cost pools, i.e
variable and fixed cost pool whereby a different allocation base is used by each pool. Better
decision making information is provided by the dual-rate as compared to the single-rate method
(Kaplan & Atkinson, 2015). An example where the single-rate method is appropriate is in a
business producing various products whereby it is very crucial to know the cost incurred in the
production of each product. Knowledge of various overhead costs associated with various
departments enables management in the pricing of their goods and services competitively. Dual
rate method is more appropriate in companies producing different kinds of goods and services.
For example, a construction company will be in a good position to use the dual rate method when
allocating the costs since it will give the two different cost rates, that is one for subcontractors
and material and the other for the direct labor.
Balanced scorecard
Traditionally, businesses have judged their health by how much money they make. This is short
term yet businesses are intended to stay longer. Balanced scorecard emanates from looking at
other additional strategic measures for a more balanced view of performance. Example: Fruit tree
seedlings business perspectives (Bigliardi & Bottani, 2010).

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Learning and Growth: Looks at the business culture. Consider awareness of stakeholders
on updates, conduciveness of environment for knowledge sharing, latest technology, etc. This
broadens the knowledge and thinking of all stakeholders.
Internal Business Process: Looks at how smoothly and efficiently the business is running.
It involves business performance measurement through obstacle identification, adaptability of
business changing conditions and worth of the products among others. This measure ensures the
quality of business eventually.
Customer Perspective: Focuses on the people who actually buy goods and services.
Measurement considers customer satisfaction, their view on competitors, etc. This is a great and
success-forward looking success indicator.
Financial: The major focus measures would-be money-making questions, stakeholder
satisfaction among others. Money keeps the business alive.
The above discussed four measures are the key ones and are closely interconnected.
Training employees and information sharing culture (Learning and Growth) ensure smooth
business running (Internal Business Processes) hence better care of customers (Customer), and
happy customers, more purchases (Financial).
For my business, I would use the internal business process and customer perspective.
This is due to the fact that for the internal business process, I will be able to establish and correct
various obstacles and hence improve the efficiency of my business. For the customer perspective
measure, I will be able to collect data on how competitors treat customers and hence use the
obtained information to perfect my customer service methods and hence win a larger market

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share. In a nutshell, it is very crucial to measure business progress as this enables one to identify
various loopholes and then correct them to improve business efficiency.

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References
Bigliardi, B., &Bottani, E. (2010). Performance measurement in the food supply chain: a
balanced scorecard approach. Facilities, 28(5/6), 249-260.
Kaplan, R. S., & Atkinson, A. A. (2015). Advanced management accounting. PHI Learning.