Bellaire Clinical Labs, Inc

6 Pages Posted: 5 Apr 2010

See all articles by Richard Brownlee

Richard Brownlee

University of Virginia - Darden School of Business

Luann J. Lynch

University of Virginia - Darden School of Business

Abstract

This case is designed for an introductory MBA management accounting course or an MBA course in management planning and control systems. It provides exposure to (1) the basic assumptions in the creation of an operating plan; (2) analyzing the difference in actual and planned financial results, including the development of flexible expense budgets, quantifying the profit impact of various business risks that impact profit, and preparing a comprehensive reconciliation of actual and planned profit; and (3) thinking through some basic issues associated with performance evaluation of functional managers. The chief executive officer of Bellaire Clinical Labs, Inc., just completed her initial review of the company's 1998 results with the company's chief financial officer. In comparing the 1998 actual results with the 1998 operating plan, the CEO expressed concern because revenues were substantially higher than planned, but those higher revenues did not translate into increased profits. The CFO is asked to investigate.

Keywords: budgeting, control systems, management accounting, management performance, performance evaluation, performance management, performance measurement, profitability analysis, management control systems

JEL Classification: A23

Suggested Citation

Brownlee, Richard and Lynch, Luann J., Bellaire Clinical Labs, Inc. Darden Case No. UVA-C-2145, Available at SSRN: https://ssrn.com/abstract=1583289

Richard Brownlee (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4800 (Phone)

HOME PAGE: http://www.darden.edu/faculty/Brownlee.htm

Luann J. Lynch

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4721 (Phone)
434-243-7677 (Fax)

HOME PAGE: http://www.darden.virginia.edu/faculty/lynch.htm

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