Divisional Performance Measurement
From Wikireedia
A Divisional performance measurement could look like this:
For Example
| Sales | 900.00 | |
| less VC | 400.00 | |
| CONTRIBUTION+ | 500.00 | (No good for management performance measurement because Mgr can control FC) |
| less controllable FC | 100.00 | |
| CONTROLLABLE PROFIT | 400.00 | (Good for Mgr performance measurement unless it's a profit center they have no control over depreciation) |
| less Non-controllable FC | 100.00 | |
| DIV PROFIT Before Corp Exp's | 300.00 | (Good measure of Division's economic performance) |
| Corp Exp | 100.00 | (Arbitrary allocation) |
| DIV NET PROFIT | 200.00 | (Good measure of comparison with peer companies) |
See Divisionalization See Residual Income
