The cost center performance evaluation report from the manager contains mainly the expenses for the unit of the company where the manager is responsible for in the company. Moreover, to make the report comparable and understandable, the report will have the budget and the actual figures that are listed alongside the expenses (Kaplan & Atkinson, 2015). The variance column contains the figures that show the difference between the budget and actual figures on the report. This has helped most of the company to find out whether, the company saved some money or not, based on the favorability of the variance that comes out when the actual figures are less than the budget figures. Therefore, the unfavorable variance is where the company spent more than the amount planned. The data have assisted the managers to come up with some transparency report which could be evaluated quickly by the directors.
How do managers use the concept of cost-benefit during the planning phase of the management process?
The planning phase
The concept helps the manager to perform several tasks like, the listing of the stakeholders of the company, listing of all the alternative programs and products that will be used by the firm during that phase, to predict the possible outcomes and benefits of the company over a particular period. Moreover, it helps in the conversion of all the costs and benefits into a common or perhaps one currency. In the calculation of the net present value and apply an appropriate discount rate and finally to adopt a recommended choice for the company that will make the company be on the safer side while carrying out its operations (Kaplan & Atkinson, 2015).
Kaplan, R. S., & Atkinson, A. A. (2015). Advanced management accounting. PHI Learning.