To complete this Pre-Assessment, do the following:
Review the Assessment Instructions and the rubric to ensure you understand the requirements for the Assessment.
Prepare an outline, including a draft References section, of the business report document you will prepare for a midsize company to help its leadership team better understand how accounting information impacts decision making. (Note: Your outline does not need to include the calculations you will provide in your final report.) Ensure that your outline begins with an Introduction and includes both major and minor points for each of the four main parts.
Overview of Assignment
For this Performance Task Assessment, you will take on the role of a consultant to provide a report on using accounting information for decision making to a fictional organization so they can better prepare for the future.
Assessment Submission Length: 6- to 9-page business report (excluding title page and references) and a budget and performance report in Excel.
Part 1: Financial Information for Decision Making (3–4 pages)
In Part 1 of your business report, you are to provide an analysis on financial statements, strategic planning, budgeting, and forecasting. In the context of this Assessment, the organization’s leaders would use this information to develop their draft budget, which they would then provide to you in Part 2. In your analysis, address the following:
Describe the four basic financial statements—income statement, statement of stockholders’ equity, statement of financial position (also known as a balance sheet), and statement of cash flows—and the purpose of each.
Compare the concepts of strategic planning, budgeting, and forecasting for an organization. Specifically:
Describe each concept and the ways they are interrelated, as well as their differences.
Analyze the role that each concept plays within an organization. In your analysis, be sure to include how strategic planning, budgeting, and forecasting are used to improve organizational performance.
Be sure to include citations and references to support your work.
Explain what responsibility centers are (in general), as well as the three types of responsibility centers: cost centers, profit centers, and investment centers.
Identify the decision rights assigned to each type of center, being sure to include examples for each type of responsibility center.
Part 2: Budget Preparation
In Part 2 of your business report, you will prepare a budget in Excel and demonstrate how it was developed. You will use the organization’s year-end income statement and ideas the company has for the upcoming year, which will be provided by your SME. Be sure to address the following:
Using the AM001_Assessment_Template_Part2 document, prepare a budget of the upcoming year for the organization.
Illustrate to the organization how each line item in the budget was prepared. (Note: You will include these notes in the indicated cells within the Assessment Template.)
Note: In addition to submitting your work in Excel, you will insert your budget and your notes into your main document.
Part 3: Analyzing the Performance Report—Preparing a Flexible Budget (2–3 pages including performance report)
For the next part of your report, you will examine a performance report based on the static budget about which the owners are very concerned. They feel that the unfavorable variances that are reflected in the report indicate an area that needs to be addressed, but they are looking to you for a better understanding and concurrence. Your SME will provide you with a performance report to use for this part of the Assessment, which will look like the following but include the numerical values to replace the variables (i.e., “X”):
Performance Report
For month ending June 20xx
Budget
Actual
Variance Favorable or Unfavorable
Production in Number of Assemblies
X
X
X
Costs:
Indirect Labor
$ X
$ X
$ X
Supplies
$ X
$ X
$ X
Utilities
$ X
$ X
$ X
Total
$ X
$ X
$ X
To complete this part, address the following:
Note: In addition to submitting your work in Excel, you will insert your performance report into your main document.
In your report, analyze why the original report was incorrect and explain the conclusion you reached based on the performance report.
Then identify at least three questions regarding the performance report and include a rationale for why you asked each question.
Part 4: The Balanced Scorecard (1–2 pages)
One of the owners read recently that the balanced scorecard is a strategic-based performance management system and is wondering if it would be beneficial to implement a balanced scorecard approach. For the last part of your report, you will provide an analysis of how using the balanced scorecard can benefit the company. To complete this part, address the following:
Explain how the balanced scorecard communicates strategy and provide examples.
Examine the four quadrants on the balanced scorecard, how they are related, and what their impact is on financial performance.
