10 Pages Posted: 21 Oct 2008
Jim Quick, president of Bay Industries, is considering how much bonus he should pay to each of his three division managers. One part of their bonus is already determined by formula, and he has to decide how much to award each manager in the other part. The case provides financial information for the past three years and some descriptive information about each division. The case enables students to explore the extent to which performance measurement of the business can and should be separated from performance evaluation of the manager; the strengths and weaknesses of using formulas or subjective judgment on which to base bonus payments; the influence of apparently uncontrollable or fortuitous events; and the probable importance of non-financial dimensions in the overall evaluation of performance.
Keywords: cost accounting, management-control systems
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