Management Accounting and Performance Evaluation Essay

worry accounting and Performance Evaluation - Essay ExampleFacts of the Case Following are the facts of the case Shirley Banks has recently joined PFA Ltd as pulverisation manager with a motive to increase the turnover and market share. The factory runs for 24 hours with three eight-hour stimulates. The shifts are rotated in such a manner that no nonpareil team has to consistently work at night. Currently the factory has a high number of temp staff and the production is behind the targets. The shipment of orders is always done late. The workers are highly discontent delinquent to the frequent impractical actions by the circumspection 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 throw up undue strain on the workers. Moreover, the worldwide office costs are allocated to each shift manager. T he boilersuit effect is that the workers are not motivated enough. The logistics manager is running the local election campaign and in doing so he is using the companys resources. No one has raised the issue so far. Nature of the Problem The basic nature of the problem lies with the incompetent management control process in the company. This has caused several other problems such as late order delivery, highly de-motivated workers, unachieved targets, unexplained allocation of general office costs to each shift manager and high level of temporary workforce. Management Accounting Control Systems Although the management accounting control systems and management control systems are mostly used interchangeably, the management accounting control is but one aspect of the control mechanism exercised by the management. The primary civilise of management control systems is to achieve the organizations objectives by influencing employee behaviours. There are three unlike types of control ap proaches i.e. action controls, results control, personnel and cultural controls (Merchant, 1998 cited in Drury, 2007, p.388). The management accounting control system is cogitate to the results control. It is based on two elements, the one is evening gown planning process and the second is accountability accounting. The formal planning process encompasses budgeting process and long-term planning process whereas the indebtedness accounting involves the establishment of responsibility centres (Drury, 2007, p.395). Responsibility Accounting The responsibility accounting involves creating responsibility centres to make accountable the individuals for financial results and outcomes. The individuals responsible for responsibility centres are made accountable any deviations from budget targets. Overall, the responsibility accounting involves Identification of Controllability The items, which can be controlled by managers and those which they cannot control and therefore, should not be held accountable for, should be identified. This is based on controllability principle. The principle states that only those costs can be or should be charged to responsibility area that can be influenced by the manager responsible. This principle is applied by