ACCT 23021 Lecture Notes - Lecture 13: Balanced Scorecard, Regional Policy Of The European Union, Profit Center
2 Aug 2020
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Describe the balanced scorecard and identify kpis for. Understand decentralization and describe different types of responsibility centers. Decentralize: split operations into different operating segments; management delegates decision-making responsibilities. Provides management with feedback it needs to maintain control over the entire organization. Responsibility center: part of an organization whose manager is accountable for planning and controlling certain activities. Ex: lower-level managers often responsible for budgeting and controlling costs of a single value chain function. Responsibility accounting: system for evaluating the performance of each responsibility center and its manager. Performance reports compare budgets with actual results for each center. Performance report: compares actual revenues and expenses against budgeted figures. Favorable variance: causes operating income to be higher than budgeted. Unfavorable variance: causes operating income to be lower than budgeted. Management by exception: only investigate budget variances that are relatively large. Performance reports are often presented in contribution margin format with a line called segment margin.
