Divisional Performance Measurement

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