1. Are the vice president’s comments about cost and schedule variance correct? Yes! As we have seen in the case study the Spokane industries are very particular about the earned value reports, as we seen in the reports that the Franklin electronics provided is seemed to be a very basic according their view. The values of cost variance at the 2nd month are like 6K, 2K, 3K, 3K, here the total comes to 14k ($14,000) and the same cost variance values in the following month are presented as 7K, 3K, 5K, 10K ($25,000) respectively, so here we can see that the values that were provided in the 2nd month are less than 3/4th of the 3rd month. Comes to the scheduling variance the values given to the 2nd month are said to be 8K, 1K, 2K, 20K ($31,000), the 3rd month calculations are in the order 12K, 3K, 4K, 26K($45,000), so by seeing this we can easily say that the scheduling variance is overrated nearly 50% of its value in the previous month. So, whatever the sponsor said in the case study is true. I hope their main aim for the need of these earned value reports is to reduce the interchange meet...
[5] Colin Drury, Management and Costing Accounting, (7th edition), Chapter 17, Standard costing and variance analysis, p. 425-436
be a thing of the past. Information that has been funneled to Accounting headquarters thru
...ts stakeholders and stabilized the internal culture. If compensation for the organization’s executives were tied to designated performance indicators for ARC (Lytle, 2013), the organization may actually operate more efficiently and effectively.
...everal employees before they are considered correct to submit into accounting systems. All transactions will require a series of reviews and dual sign off before final approval.
This analysis shows that the projects NPV as 13.37 million dollar. Our result is slightly different than the presenting team because of rounding. But both of our teams had positive NPV which suggest that the project should be accepted.
d. To improve the understandability and comparability of amounts reported by requiring employers with similar plans to use the same method to measure their pension and other postretirement benefit obligations and the related costs of the postretirement benefits.
Spokane Industries has contracted Franklin Electronics for an 18 month product development contract. Franklin Electronics is new to using project management methodologies and have not been exposed to earned value management methodologies. Even though Franklin and Spokane have worked together in the past, they have mainly used fixed price contracts with little to no stipulations. For this project Spokane Industries is requiring Franklin Electronics to use formalized project management methodologies, earned value cost schedules, and schedules for reports and meetings. Since Franklin Electronics had had no experience with earned value management, the cost accounting group was trained in the methodology in order to bid for the project. Franklin Electronics won the contract because they had the lowest price. They developed a work breakdown structure that consisted of 45 work packages with 4 of the work packages being delivered in the first 4 months. They also developed a simple status report consisting of the work packages due, budgeted cost for work scheduled, budgeted cost for work performed, actual cost for work performed, cost variance and price variance. When they deliver the first status report, the Franklin Electronics project manager is called into an emergency meeting because Spokane Industries vice president is unhappy with the progress. In this paper, we will discuss Six Sigma process improvement for tracking time and cost, recommendations on how Franklin Electronics can use project management principles to meet their goal of improving efficiency and empowering management to make better and informed decisions through the use of Earned Value Management, how an effective Earned Value Management System contributes ...
... standard and help to reduce the preparer cost. And it has also enhanced the financial statements decision usefulness and make the organization prepare for expanded disclosure requirements.
outlined in this report, but will need to be executed to ensure the increased profitability of
...ccurately reflects the intrinsic value of the company from the shareholders point of view and their expectations of future earnings.
...r investigate what sort of rewards or fringes would their employee’s desire compared to the old method of monetary incentives for the beneficial for the company”.
To test the financial feasibility and plan acceptability, there must be information on the magnitude, and share of estimated project cost that are reimbursable. This information can be derived from cost allocation. Also where cost sharing is required in the multipurpose planning process cost allocation can be applied. Cost allocation also provides information necessary for allocating the real expenditures ensuring that the cost account are maintained in line with plan formulation and allocation principles during the subsequent c...
...lementation of the solution by the committee. Worker compensation cost also reduced by 10%. This saved Quad graphics money that would be used in compensation and valuable days that would have been lost due to worker absence (Lauren, 2006).
If the company follow this recommendations, it will obtain a profit of $ 531,000 that represents $180,000 more than with seasonal production
...time not provide them information that would allow them to game the system to receive higher compensation than they deserve. The tool’s desire is to fairly compensate the employee for reaching the organizations objectives and making the company successful.