Module 22 - Module22 StandardCostsand PerformanceReports

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©Cambridge Business Publishers, 2009 ©Cambridge Business Publishers, 2009 Click to edit Master subtitle style Module 22 Standard Costs and  Performance Reports
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©Cambridge Business Publishers, 2009  ©Cambridge Business  Responsibility Accounting n The structuring of performance reports to  emphasize the factors controlled by units or  managers n Should exclude non-controllable costs n Most include comparisons of actual results  with budgeted amounts n Customized to emphasize activities of each  organizational unit or value chain element
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©Cambridge Business Publishers, 2009  ©Cambridge Business  Responsibility Accounting and  § Organization structure is the arrangement of  lines of responsibility within the organization § Alternative organization structures § Functional-based such as marketing vs. production  vs. research, etc. § Product-based § Geographically-based § Service-based § Customer-based
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©Cambridge Business Publishers, 2009  ©Cambridge Business  {6 C094F2-9EA5-49DB-8138-9CB51E1E6 5A} Cost Center {FEC B18A-B6AD-4EBF-85A5-35C5C4B1485D} Revenue Center {C7318B6E-212C-4 73-A804-6E28DA636251} Profit Center {9C 97023-E 92-4F0D-9DD3-0514 68F3AF7} nvestment Center Types of Responsibility Centers Less  responsibility More  responsibility
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©Cambridge Business Publishers, 2009  ©Cambridge Business  Cost Center § A responsibility center whose manager is  responsible only for managing costs § No revenue responsibility § Examples in a manufacturing plant § Tooling department § Assembly activities § Examples in a retail store § Inventory control function § Maintenance department Production stage
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©Cambridge Business Publishers, 2009  ©Cambridge Business  Revenue Center § A responsibility center whose manager is  responsible for the generation of sales  revenues § Sometimes assigned responsibility for  controllable costs incurred in generating 
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©Cambridge Business Publishers, 2009  ©Cambridge Business  Profit Center n A responsibility center whose manager is  responsible for revenues, costs, and resulting  profits n Most frequently a segment of an company such  as a n Product line n Marketing territory n Store
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©Cambridge Business Publishers, 2009  ©Cambridge Business  Investment Center § A responsibility center whose manager is  responsible for the relationship between its  profits and the total assets invested in the  center § High degree of organization autonomy § Evaluated on the basis of how well 
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©Cambridge Business Publishers, 2009  ©Cambridge Business  Static and Flexible Budgets n Based on original  operating budget n Constant,  regardless of actual  activity Static Budget Flexible Budget Set for a series of  possible production and  sales volumes, or Adjusted to a particular  level of production Used to determine what  costs should be for a  particular activity level
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This note was uploaded on 11/08/2010 for the course ACC 5056 taught by Professor J.goslinga during the Spring '10 term at University of Florida.

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Module 22 - Module22 StandardCostsand PerformanceReports

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