Chapter 9_blackboard - CHAPTER 9 9-1 Chapter Overview...

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CHAPTER 99-1
Chapter OverviewResponsibility AccountingDecentralizationResponsibility CentersPerformance MeasurementReturn on InvestmentResidual IncomeBalanced ScorecardResponsibility ReportsGuidelinesManagement by ExceptionControllability
An accounting system thatprovidesinformation. . .Responsibility AccountingRelating to theresponsibilities ofindividualmanagers.To evaluatemanagers oncontrollable items.Accounting as the Languageof Business
Decision Making is Pushed DownSupervisorSupervisorMiddleManagementSupervisorSupervisorMiddleManagementTopManagementDecentralization often occurs asorganizations continue to grow.Responsibility AccountingDecentralizationThe delegation of freedom to make decisionsis calleddecentralizationContinuum
Improves qualityof decisionsEncourages upper-level management toconcentrate on strategic decisionsImprovesproductivityDevelopslower-levelmanagersImprovesperformanceevaluationAdvantagesResponsibility AccountingDecentralization
Successful implementation ofresponsibilityaccountingdepends on clear lines of authorityand clearly defined levels of responsibility.Vice Presidentof FinanceDepartment ManagerStore ManagerVice Presidentof OperationsVice Presidentof MarketingPresidentBoard of DirectorsResponsibility Accounting
Aresponsibilitycenteris a set of activitiesassigned to a manager, a group ofmanagers, or other employees.Identifying Responsibility CentersTypes of Responsibility CentersInvestmentCenterProfitCenterCost CenterResponsibility Accounting -Responsibility Centers
Organization ChartCorporate headquartersPanther Holding CompanyLumbermanufacturingdivisionHomebuildingdivisionFurnituremanufacturingdivisionWilson CarpetCompanySelma SophaCorporationTablesIncorporatedSalesdepartmentProductiondepartmentPlanningdepartmentAccountingdepartmentCuttingdepartmentAssemblydepartmentFinishingdepartmentResponsibilityLevel12345?Center?Center?Center
CostCenterProfitCenterInvestmentCenterEvaluation MeasuresProfitabilityContribution ISReturn on investment (ROI)Residual income (RI)Cost Standards(Control Quantity andQuality of services)Responsibility CenterPerformance Measurement
Return on InvestmentReturn on investment is the ratio ofincome to the investment used togenerate the income.ROI=Operating IncomeOperating AssetsPerformance Measurement

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Term
Fall
Professor
NICHOLASW.SCHROEDER
Tags
Accounting, Management, Revenue, Return On Investment ROI, performance measurement, Panther Holding Company

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