Steps of choosing an accounting based performance, Managerial Accounting

Assignment Help:

Steps of choosing an accounting based performance measure

Consider the overall goal of the organization as a whole. It is important to choose a measure of accomplishment that represents top management goals. Such measures include operating income, net income, Return on investment (ROI), sales, etc.  Determine whether the measure should be maximized or minimized.

1) Select definitions for such items as income and investments (i.e. should income be based on variable or absorption costing? Must central overheads be allocated? should investments consist of total assets, net assets or net worth?)

2) How should items such as income and investments be measured (i.e. should we use historical costs, replacement costs, realizable or current values?)

3) Determine the standards that should be applied (i.e. should all divisions be required to earn the same rate of return on all investments?)

4) What timing of feedback is needed?  Should it be monthly or quarterly?


Related Discussions:- Steps of choosing an accounting based performance

Point estimate of probabilities, POINT ESTIMATE OF PROBABILITIES This a...

POINT ESTIMATE OF PROBABILITIES This approach requires a number of different values for each of the uncertain variables to be selected. These might be values that are reasonabl

Positioning, Positioning An essential part of the planning process is p...

Positioning An essential part of the planning process is positioning the organization to attain its goals. Positioning is a wide concept and depends on gathering and evaluating

Accounting, what is a base of managerial accounting

what is a base of managerial accounting

Bench marking, BENCH MARKING In the current business environment, organ...

BENCH MARKING In the current business environment, organizations are under a lot of pressure to improve performance and that of their divisions or subsidiaries. Bench marking i

[email protected], Why might managers favour this ABC system instea...

Why might managers favour this ABC system instead of the older system that allocated all MOH costs on the basis of direct? labour?

Starbucks project, 1)Prepare a three (3) year forecast of estimated future ...

1)Prepare a three (3) year forecast of estimated future cash flows for you company and give valid economic/business reasons for your projections. This means you will have a stateme

Explain the modern control methods, 1. Explain the modern control methods w...

1. Explain the modern control methods with examples. 2. What are the reports produced for performance measurement? Demonstrate.

What are the advantages of kaizen costing, Advantages of kaizen costing ...

Advantages of kaizen costing 1) Record individual tasks 2) Instantly replay observation 3) Select and use best practice 4) Categorize activities using kaizen terminolo

What are the advantages of ratio analysis, Advantages of ratio analysis ...

Advantages of ratio analysis 1) Helpful in financial analysis: financial analysis is easier if accounting ratios are used to analyze the different financial statement relatio

State the factors of cvp, State the factors of CVP The three factors of...

State the factors of CVP The three factors of CVP analysis I e cost volume and profit are interconnected and dependent on one another . for example profit depends upon sales se

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd