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