Management Accounting and Performance Evaluation

Management Accounting and Performance Evaluation Essay example
Finance & Accounting
Pages 9 (2259 words)
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Management Accounting and Performance Evaluation- PFA Limited Table of Contents Table of Contents 2 Introduction 3 Facts of the Case 3 Nature of the Problem 4 Management Accounting Control Systems 4 Responsibility Accounting 5 Identification of Controllability 5 Determination of difficulty of financial targets 5 Participation of managers in setting the financial targets 7 Contingency Theory 8 Characteristics of an Effective Performance Measurement 8 Use of Accounting Information in Performance Evaluation 9 Recommendations 10 Conclusion 12 References 13 Introduction This project is an analysis of the management control problems faced by Plastics For All Ltd.


Facts of the Case Following are the facts of the case: Shirley Banks has recently joined PFA Ltd as factory manager with a motive to increase the turnover and market share. The factory runs for 24 hours with three eight-hour shifts. The shifts are rotated in such a manner that no one team has to consistently work at night. Currently the factory has a high number of temporary staff and the production is behind the targets. The shipment of orders is always done late. The workers are highly discontent due to the frequent impractical actions by the management regarding the factory management. Recent examples are the decisions to change every shift to twelve hours, cancellation of overtime payments and introduction of weekly performance reports. The high unachievable monthly targets have put undue strain on the workers. Moreover, the general office costs are allocated to each shift manager. The overall effect is that the workers are not motivated enough. ...
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