Questions: 5. Managerial accounting provides performance reports to internal users. Which of the following is considered an advantage of performance reports? a. Performance reports allow management to identify any large amounts of scrap materials or employee downtime. b. A report could analyze the potential efficiencies and dollar savings of purchasing computerized equipment to speed up the production process. c. A report could analyze how many units need to be sold to cover operating costs and expenses and used to set monthly selling targets and bonuses for sales personnel. d. All of these choices are correct.

5. Managerial accounting provides performance reports to internal users. Which of the following is considered an advantage of performance reports?
a. Performance reports allow management to identify any large amounts of scrap materials or employee downtime.
b. A report could analyze the potential efficiencies and dollar savings of purchasing computerized equipment to speed up the production process.
c. A report could analyze how many units need to be sold to cover operating costs and expenses and used to set monthly selling targets and bonuses for sales personnel.
d. All of these choices are correct.

Transcript text: 5. Managerial accounting provides performance reports to internal users. Which of the following is considered an advantage of performance reports? a. Performance reports allow management to identify any large amounts of scrap materials or employee downtime. b. A report could analyze the potential efficiencies and dollar savings of purchasing computerized equipment to speed up the production process. c. A report could analyze how many units need to be sold to cover operating costs and expenses and used to set monthly selling targets and bonuses for sales personnel. d. All of these choices are correct. $\qquad$ Check My Work 2 more Check My Work uses remaining. All work saved. Save and Exit Submit Assignment for C

Solution

The answer is D: All of these choices are correct.

Explanation:

a. Performance reports allow management to identify any large amounts of scrap materials or employee downtime.

This is correct because performance reports are designed to provide insights into operational inefficiencies, such as excessive scrap or downtime, which can help management take corrective actions to improve productivity and reduce waste.

b. A report could analyze the potential efficiencies and dollar savings of purchasing computerized equipment to speed up the production process.

This is correct as well. Performance reports can include analyses of potential investments, such as new equipment, by evaluating their impact on efficiency and cost savings, aiding in informed decision-making.

c. A report could analyze how many units need to be sold to cover operating costs and expenses and used to set monthly selling targets and bonuses for sales personnel.

This is also correct. Performance reports can be used to determine break-even points and set sales targets, which are crucial for planning and motivating sales teams through bonuses and incentives.

Since all the options describe valid advantages of performance reports in managerial accounting, option D is the correct choice.

Was this solution helpful?