Divisional Performance Measurement: Difference between revisions
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less VC||400 | less VC||400 | ||
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CONTRIBUTION+ | CONTRIBUTION+|500|''(note:no good for management performance measurement because Mgr can control FC)'' | ||
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less controllable FC | less controllable FC|100 | ||
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CONTROLLABLE PROFIT | CONTROLLABLE PROFIT|400|''(Good for Mgr performance measurement unless it's a profit center they have no control over depreciation)'' | ||
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less Non-controllable FC | less Non-controllable FC|100 | ||
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DIV PROFIT Before Corp Exp's | DIV PROFIT Before Corp Exp's|300|''(Good measure of Division's economic performance)'' | ||
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Corp Exp | Corp Exp|100|''(Arbitrary allocation)'' | ||
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DIV NET PROFIT | DIV NET PROFIT|200|''(Good measure of comparison with peer companies)'' | ||
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Revision as of 08:19, 9 February 2011
A Divisional perfoamnce measurement could look like this:
For Example
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)| Sales | 900 |
See Divisionalization See Residual Income
