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

Continuous probability distribution, CONTINUOUS PROBABILITY DISTRIBUTION (U...

CONTINUOUS PROBABILITY DISTRIBUTION (USE OF NORMAL DISTRIBUTION) In reality the C-V-P variables might take any values in a continuous range. It could therefore be more appropriat

The assignment model, The assignment model Consider the situation of as...

The assignment model Consider the situation of assigning m jobs (or workers) to n machines. A job i(= 1,2,3 ...m) when assigned to machine j(= 1,2,3 ...n)  acquires a cost Cij.

Working capital management, stanley shoe company established a line credit ...

stanley shoe company established a line credit with a local bank. the maximum amount that can be borrowed under the terms of the agreement is $100000 at an annual rate of 12%. a co

Assignment help, I need help making sure I did my accounting assignment cor...

I need help making sure I did my accounting assignment correctly

Calculate the total revenue obtainable when the market clear, Question: ...

Question: (a) (I) The following equations relate to the market conditions for pullovers at a given point of time: Demand Function: Q d = 1200 - P Supply Function: Q s

Calculate the standard cost and standard selling of product, Question 1: ...

Question 1: A company's budgeted production of Product Zebra for the month ending 30 November 2004 was 10,000 units. The fixed overheads were budgeted at Rs3,200,000. The st

What are the resons to use variance analysis, What are the Resons to use Va...

What are the Resons to use Variance analysis Variance analysis should be a continuous process for following reasons: 1) Labor rates, salary levels etc, changes due to union

Management accounting, Management Accounting An accounting discipline c...

Management Accounting An accounting discipline concerned with the use of financial information. It used to relevant information by managers and other decision makers inside a s

Status resources, Status Resources We had classified constraints as sca...

Status Resources We had classified constraints as scarce and abundant, depending respectively on whether or not the optimum solution "consumes" the entire available amount of t

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