Boland Manufacturing prepared a 2016 budget for 120000 units of product. Actual production in 2016 was 130000 units. To be most useful what amounts should a performance report for this company compare?
A) The actual results for 130000 units with the original budget for 120000 units.
B) The actual results for 130000 units with a new budget for 130000 units.
C) The actual results for 130000 units with last year's actual results for 134000 units.
D) It doesn't matter. All of these choices are equally useful.

Question

Quizplus · Accepted Answer

To be most useful, a performance report should compare the actual results for the number of units produced (130,000 units) with a budget prepared for that same level of production (130,000 units). This allows for a fair and relevant comparison of actual performance against planned performance, adjusting for the difference in production volume.

Boland Manufacturing Prepared a 2016 Budget for 120000 Units of Product