Advanced Management Accounting

Performance Measurement and Management

Allulite Windows and Joinery is a manufacturer of aluminium doors, windows and other joinery products for residential and commercial applications. You recently visited Allulite’s production facility in East Tamaki to gather information regarding their manufacturing processes.
The company has a number of factory staff who are paid an hourly rate and expected to meet minimum production targets. Office staff are paid salaries and sales staff are remunerated via a base salary plus a performance bonus based on sales targets. Senior managers are all shareholders in the company and, as well as drawing reasonable salaries, all share in the profits the company makes.
Senior management are reviewing the way they review and compensate their workers and have heard that you have been studying financial and non-financial performance measurement systems. They wonder whether incorporating some non-financial performance measures into their decision-making might add value and have asked you to complete a report to them identifying whether a measurement reporting system such as the Balanced Scorecard might help them.
Write a REPORT to Bruce Mason, the managing director of Allulite which:

a) Identifies and describes a range of performance measurement metrics that might be appropriate to Allulite
b) Explains the value of combining both financial and non-financial measures
c) Provides a Balanced Scorecard specifically for use by Allulite
d) Identifies and explains the pros and cons of the BSC and its implementation
e) Recommends, to Bruce whether to adopt a BSC at Allulite.

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