Performance evaluation, profit center (LO3). Lori White is the chief executive of a division of...
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Accounting
Performance evaluation, profit center (LO3). Lori White is the chief executive of a division of Visions, Inc. Lori's division makes high-quality frames that sell for premium prices. For the most recent budget year, her division expected to sell 80,000 frames and generate $9.6 million in revenue. Actual sales and revenue were 100,000 frames and $11 million, respectively. Lori delegates all marketing and sales related decisions (including pricing) to her marketing manager.
Required:
a.Should Lori be pleased with the revenue performance? Consider the fit of the results with the firm's strategy when formulating your answer.
b. Suppose instead that the actual sales and revenues were 70,000 frames and$9,100,000, respectively. Should Lori be upset with the revenue performance? List some of the issues that Lori should look into when analyzing this performance.
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