Determining Benchmarks
This week we covered Chapter 7, Budgeting and Chapter 8, Evaluating Variances from Standard Costs. Budgeting is used to project revenue and costs into the future, typically twelve months. Evaluating variances from standard costs is the process of evaluating performances against benchmarks serving as goals. From the company you used in Week 1, please speculate how benchmarks can be determined when evaluating variances from standard costs. Provide detailed examples and how you arrived at those examples. Please provide original work. No plagiarizing.
Company Used in Week 1 is below:
Managerial accounting also called cost accounting is the process of measuring after identifying, analyzing, interpreting and also communicating information to the supervisors or the managers in pursuit of objectives of a particular Organization/Company. Fiat Chrysler Automobiles N.V. is an Italian-American Multinational entity and ranked as the world’s number eight largest auto creators (Maryanne M. Mowen, 2015) . The Company is headquartered in the Netherlands with the financial headquarters based in London for purposes of tax filing among others.
At Fiat Chrysler Automobiles N.V, managerial accounting is used in consolidating the stakes with an example of an instance where the Company together with Renault raised the stakes for themselves by ruling out the closure of plants (Maryanne M. Mowen, 2015) . This increases pressure to achieve more than $4 billion, in particular, promised savings for the year from pooling research and procurement investments. Such a plan is a forward move for a merging two entities hence calling for analyzing, interpreting and communicating this information to the stakeholders (Maryanne M. Mowen, 2015) .
References
Maryanne M. Mowen, D. R. (2015). Managerial Accounting: The Cornerstone of Business Decision-Making at Fiat Chrysler Automobiles N.V. Chicago: Advent Press.