Divisional Performance Measurement: Difference between revisions
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For Example | For Example | ||
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Sales|900 | Sales||900 | ||
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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 | ||
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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)'' | ||
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DIV NET PROFIT|200|''(Good measure of comparison with peer companies)'' | DIV NET PROFIT||200||''(Good measure of comparison with peer companies)'' | ||
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Revision as of 08:13, 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
