Divisional Performance Measurement: Difference between revisions
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*Sales...........................900 | *Sales...........................900 | ||
*less VC.........................400 | *less VC.........................400 | ||
*CONTRIBUTION+...................500...'(note:no good for management performance measurement because Mgr can control FC' | *CONTRIBUTION+...................500...''(note:no good for management performance measurement because Mgr can control FC)'' | ||
*less controllable FC............100 | *less controllable FC............100 | ||
*CONTROLLABLE PROFIT.............400...'(Good for Mgr performance measurement unless it's a profit center they have no control over depreciation | *CONTROLLABLE PROFIT.............400...''(Good for Mgr performance measurement unless it's a profit center they have no control over depreciation)'' | ||
*less Non-controllable FC........100 | *less Non-controllable FC........100 | ||
DIV PROFIT Before Corp Exp's.....300...'(Good measure of Division's economic performance)' | *DIV PROFIT Before Corp Exp's.....300...''(Good measure of Division's economic performance)'' | ||
Corp Exp.........................100...'(Arbitrary allocation) | *Corp Exp.........................100...'(Arbitrary allocation) | ||
DIV NET PROFIT...................200...'(Good measure of comparison with peer companies)' | *DIV NET PROFIT...................200...''(Good measure of comparison with peer companies)'' | ||
See [[Divisionalization]] | See [[Divisionalization]] | ||
Revision as of 07:59, 9 February 2011
A Divisional perfoamnce measurement could look like this:
For Example
- Sales...........................900
- less VC.........................400
- CONTRIBUTION+...................500...(note:no good for management performance measurement because Mgr can control FC)
- less controllable FC............100
- CONTROLLABLE PROFIT.............400...(Good for Mgr performance measurement unless it's a profit center they have no control over depreciation)
- less Non-controllable FC........100
- DIV PROFIT Before Corp Exp's.....300...(Good measure of Division's economic performance)
- Corp Exp.........................100...'(Arbitrary allocation)
- DIV NET PROFIT...................200...(Good measure of comparison with peer companies)
See Divisionalization See Residual Income
