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chapter%20120 - Chapter 12 Performance Evaluation and...

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September 7, 2011 Accounting 2102 1 Chapter 12 Performance Evaluation and Decentralization
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Who has decision making authority? . . . depends on the structure of the company Centralized Operations Decentralized Operations Why would a company choose to decentralize? 1. local information 1. free up top management 1. training and motivating 1. autonomous business units September 7, 2011 Accounting 2102 2
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How does a company decentralize? divide into segments Products Geographic Responsibility responsibility centers . . . division whose manager is held accountable for specified sets of activities Four types: cost, revenue, profit, and investment September 7, 2011 Accounting 2102 3
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Responsibility Centers Responsibility Center Manager Held Responsible For Performance Tools Cost Flexible Budgets and Variance Analysis Revenue Flexible Budgets Profit Segmented Income Statements Investment Return on Investment (ROI) September 7, 2011 Accounting 2102 4
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chapter%20120 - Chapter 12 Performance Evaluation and...

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