Management control system
? Plant profitability is a responsibility for sales and plant manager, sales manager had sole responsibility for the price, sales mix, and delivery schedules and the plant manager had responsibility for plant operations and plant profits . Manufacturer efficiency coming from plant for every month is the one that have direct impact into profit that’s why plant manager achievement has big impact into company profit . In Vershire case comparative efficiency chart for every month publicized to measure plant efficiency, that make plant managers' compensation packages were tied to achieving profit budgets . Performance Evaluation On the second business day after the close of each month, every plant faxed certain critical operating variances which were combined into a "variance analysis sheet ." A compilation of all variance sheets was distributed the following morning to interested management . Plant managers were not supposed to wait until these monthly statements were prepared to identify unfavorable variances; rather, they were expected to be aware of them (and to take corrective action) on a daily basis . Four business days after the close of every month, each plant submitted a report showing budgeted and actual results . Once these reports were received, corporate management reviewed the variances for those items where figures exceeded budgetary amounts, thus requiring plant managers to explain only the areas in which budgeted targets had not been met . The focus was on net sales, including price and mix changes, gross margin, and standard manufacturing cost .