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

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

Prepare a revised performance report, Yuma foods acquire Aldo's tortillas s...

Yuma foods acquire Aldo's tortillas several years ago. Aldo's continued to operate as an independent company, except that Yuma foods has exclusive authority over capital investment

Balanced score card, Balanced Score Card This is a popular approach in ...

Balanced Score Card This is a popular approach in current management thinking which consists of a variety of indicators both financial and non-financial. The balanced scorecard

What is incremental budgeting, Incremental budgeting Incremental budget...

Incremental budgeting Incremental budgeting uses a budget prepared using a last period budget or actual performance as a base with incremental amount asses for the new budget p

Standard error of estimate , Standard error of estimate (Se) The coeffi...

Standard error of estimate (Se) The coefficient of determination r 2 gives us an indication of the reliability of the estimate of total cost based on the regression equation b

Definition of accounting, Definition of accounting Accounting is the pr...

Definition of accounting Accounting is the procedure of recognizing measuring and communicating economic information to allow informed judgments and decisions by the user’s inf

Depriciation, In 2007, the controller of the XYZ Company discovered that 20...

In 2007, the controller of the XYZ Company discovered that 2006 depreciation expense was overstated by $50,000, a material amount. Assuming an income tax rate of 40 percent, the pr

Overhead analysis sheet, Ask question #1.The annual overhead costs for Mona...

Ask question #1.The annual overhead costs for Mona Claire Holdings which has three production centres and two service centres as follows; Indirect wages and supervision Machine

What is pricing under decline stage, Q. What is Pricing under decline stage...

Q. What is Pricing under decline stage? Pricing under decline stage: under this stage sales are at their highest point. He should reduce the price if necessary taking the compe

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