Divisional Performance Measurement

A Divisional performance measurement could look like this:

For Example

Sales	900.00
less VC	400.00
CONTRIBUTION+	500.00	No good for management performance measurement because Mgr can control FC
less controllable FC	100.00
CONTROLLABLE PROFIT	400.00	Good for Mgr performance measurement unless it's a profit center they have no control over depreciation
less Non-controllable FC	100.00
DIV PROFIT Before Corp Exp's	300.00	Good measure of Division's economic performance
Corp Exp	100.00	Arbitrary allocation
DIV NET PROFIT	200.00	Good measure of comparison with peer companies

• See Divisionalization
• See Residual Income
• See Performance Pyramid