Divisional Performance Measurement
From Wikireedia
eg Sales...........................900 less VC............................400 CONTRIBUTION................500...no good for management performance mmeasurement because Mgr can control FC less controllable FC...........100 CONTROLLABLE PROFIT.....400...Good for manager perfoermance measurement. But if its a profit center they have no control over depreciation less Non-con FC................100 DIV PROFIT BF Corp Exp...300Good measure of Fiv's economic perforamance Corp Exp..........................100 Arbitrary allocation DIV NET PROFIT................200Good measure of comaprison with peer companies
See Residual Income
