Divisional Performance Measurement: Difference between revisions
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Sales|900 | |Sales | ||
|900 | |||
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less VC|400 | |less VC | ||
|400 | |||
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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)'' | ||
Revision as of 08:25, 9 February 2011
A Divisional perfoamnce measurement could look like this:
For Example
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)| Sales | 900 |
| less VC | 400
}| |
See Divisionalization See Residual Income
