Accounting Business Reporting for Decision Making

CHAPTER 14 Performance measurement 593

Goals Measures Drivers

2. Customer
   Increase customer
   satisfaction

Customer satisfaction

measure

•    Repeat customers

•    Number of   customer   referrals

•    Customer   satisfaction    survey

•    On-time    deliveries

Market share Market share •  New    customers   obtained

3. Internal operations
   Customer response time Customer response time • Number of steps from customer order
   
   to delivery
   • Delivery time
   Improve quality Spoilage and rework
   (dollar values)

•    Defective  units   produced

•    Time   on   rework

Quality training    and 

documentation

•    Update manuals

•    Number of   employees  undertaking

quality training

Reduce stock levels Raw materials inventory

(dollar values)

•    Number of   suppliers

•    Number of   supplier   agreements

Finished goods inventory

(dollar values)

•    Warehouse  utilisation

4. Innovation and improvement
   Empower workforce Employee satisfaction
   survey

•    Employee   benefits,   facilities  and

challenges

Employee suggestions •   Number of   employee   suggestions

Employee performance •   Number of   employees  receiving   bonuses

Technological edge Skill and knowledge

training sessions

•    Number of   employees  attending   training

Machinery investment •   Machinery  comparison  with     competitors

5. Non-market perspective
   Environment Reduce CO 2 emissions and
   energy use

•    %   of  plant  on   ‘green power’  dollar

invested in solar power

Reduce water consumption •   Capacity   of   rain    water  tanks

Community Sponsorship of community

and sporting clubs

•    $   of  services   given   to   non-profit

community and sporting

associations

14.2 Abdullah Holdings is a development company that builds infrastructure such as roads, bridges and

rail networks, as well as large commercial, retail and mining buildings. Information pertaining to

the two divisions is presented. The common costs are allocated on the number of employees, and

the corporate costs are allocated on sales revenue.

Roads and

infrastructure Buildings

Sales

Number of employees

Variable costs

Fixed costs

$

$

8 500 000

20 000

3 500 000

3 000 000

$

$

5 000 000

18 500

2 500 000

1 750 000

Common costs amounted to $1 155 000 for the year and the corporate costs were $810 000. You are

required to draw up a divisional performance report.