Responsibility Accounting课件.ppt

Responsibility Accounting;Relating to theresponsibilities ofindividual managers.;Decision Making is Pushed Down;Decentralization;Cost;Responsibility Reports; Successful implementation of responsibility accounting depends on clear lines of authority and clearly defined levels of responsibility.;Amount of detail varies according to level in organization.;Management by Exception and the Degree of Summarization; To be of maximum benefit, responsibility reports should . . . Be timely. Be issued regularly. Be understandable. Compare budgetedand actual amounts.;Responsibility Centers;Cost; Profit Center A part of the business that has control over both revenues and expenses, but no control over investment funds.; Investment Center A profit center where management also makes capital investment decisions.;Measuring Managerial Performance; Return on investment is the ratio of income to the investment used to generate the income.;ROI = ; Cola Company reports the following:  Net Income $ 30,000 Sales $ 500,000 Investment $ 200,000;ROI = 6% × 2.5 = 15% ;Improving R0I;Cola Company’s manager was able to increase sales to $600,000 which increased net income to $42,000. There was no change in investment.;Cola Company increased ROI from 15% to 21%.;ROI - A Major Drawback;ROI - A Major Drawback;Residual Income;Residual Income;Residual Income;Residual Income;Residual Income;Residual Income;Transfer Pricing;Transfer Pricing;Transfer Pricing;The ideal transfer price allowseach division manager to makedecisions that maximize thecompany’s profit, whileattempting to maximize thedivision’s profit.; Market-based transfer prices arepreferred because they promote efficiency and fairness.;Negotiated Transfer Price;Cost-Based Transfer Prices; Conflicts may arise between the company’s interests and an individual manager’s interests when transfer-price-based performance measures are used.;End of Chapter 9