Divisional Performance Measurement
From Wikireedia
(Difference between revisions)
| Line 9: | Line 9: | ||
|less VC | |less VC | ||
|400 | |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 | ||
Revision as of 10:27, 9 February 2011
A Divisional performance 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
