Divisional Performance Measurement

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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)''
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−	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)''
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−	less Non-controllable FC||100	+	less Non-controllable FC|100
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−	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)''
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−	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 10:19, 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