tailieunhanh - Lecture Survey of accounting (4/e) - Chapter 15: Performance evaluation

After you have mastered the material in this chapter, you will be able to: Describe the concept of decentralization, distinguish between flexible and static budgets, classify variances as being favorable or unfavorable,. | Chapter Fifteen Performance Evaluation © 2015 McGraw-Hill Education. 1 An accounting system that provides information . . . Responsibility Accounting Relating to the responsibilities of individual managers. To evaluate managers on controllable items. 15-2 2 Decentralization Improves quality of decisions. Encourages upper-level management to concentrate on strategic decisions. Improves productivity. Develops lower-level managers. Improves performance evaluation. Advantages 15-3 3 Responsibility Centers 15-4 4 Cost Center Profit Center Investment Center Evaluation Measures Profitability Return on investment (ROI) Residual income (RI) Cost control Quantity and quality of services Managerial Performance Measurement 15-5 5 Since the exercise of control may be clouded, managers are usually held responsible for items over which they have predominant rather than absolute control. I’m in control Controllability Concept Managers should only be evaluated on revenues or costs they control. 15-6 | Chapter Fifteen Performance Evaluation © 2015 McGraw-Hill Education. 1 An accounting system that provides information . . . Responsibility Accounting Relating to the responsibilities of individual managers. To evaluate managers on controllable items. 15-2 2 Decentralization Improves quality of decisions. Encourages upper-level management to concentrate on strategic decisions. Improves productivity. Develops lower-level managers. Improves performance evaluation. Advantages 15-3 3 Responsibility Centers 15-4 4 Cost Center Profit Center Investment Center Evaluation Measures Profitability Return on investment (ROI) Residual income (RI) Cost control Quantity and quality of services Managerial Performance Measurement 15-5 5 Since the exercise of control may be clouded, managers are usually held responsible for items over which they have predominant rather than absolute control. I’m in control Controllability Concept Managers should only be evaluated on revenues or costs they control. 15-6 6 Preparing Flexible Budgets The master budget, sometimes called a static budget, is based solely on the planned volume of activity. Flexible budgets differ from static budgets in that they show expected revenues and costs at a variety of volume levels. Flexible 15-7 7 Determining Variances for Performance Evaluation The differences between standard and actual amounts are called variances. A variance may be favorable or unfavorable. When actual sales are less than expected, an unfavorable sales variance exists. When actual sales revenue is greater than expected revenue, a company has a favorable sales variance. 15-8 8 Determining Variances for Performance Evaluation Variances are not limited to the evaluation of revenues. They can also be used to understand the differences between standard and actual amounts of costs. When actual costs are less than standard costs, cost variances are favorable because lower costs increase net income. Unfavorable cost variances exist when actual .

• Kế toán - Kiểm toán
• Survey of accounting
• Lecture Survey of accounting
• Performance evaluation
• Responsibility accounting
• Volume variances
• Flexible budget variances
• Accounting for cash
• Accounting cycle
• Financial resources
• Accounting provides information
• Internal controls
• Accounting profession
• Accounting for receivables
• Inventory cost flow
• Accounting for liabilities
• Bonds issued
• Managerial accounting
• Product costing
• Financial statements
• Ledger accounts
• Merchandising businesses
• Transportation costs
• Long term operational assets
• Depreciation method