Fine Foods

Fine Foods

Memorandum for CEO, Departmental heads and SMU heads

From: Kay Smith, head of SMU 2

Date: October 12, 2015

Subject: Product costing, special orders and performance evaluation at Fine Foods

I have long been thinking to bring my observations to the notice of my colleagues and higher management which in my opinion can add to the greater good of the organization and would help us find a better course for the future. My observations / explainations through the length of this memorandum are divided in parts namely; product costing, special orders, performance evaluation and recommendations, which are as follow:

Product Costing:

Special Order:

Performance Evaluation:

In organizations the achievement of goals and objective is measured regularly to ascertain performance and organizational direction. In order to acknowledge the human contribution towards achievement of pre-specified objectives and goals certain incentives/rewards are given to reinforce the effort put in by individuals and teams. The process of continuously measuring the contribution of individuals and team toward the preset targets is called performance evaluation.

The dynamics of both individual and team based performance are somewhat different because there is more agency cost involved in individual performance than in team based performance evaluation. As the achievement of objectives, if there are any is important for all the organizations so is the process of reinforcing the reward/responsibility.

The basic underlying concept for performance evaluation in accounting term is a well-functioning management accounting and control system that includes planning as well as performance evaluation in order to ascertain variances between budgeted and actual plans both at operational and strategic levels. Financial control, as its evident from its name is more about comparing actual to budgeted financial results. Whereas non-financial measures appraises...