Managerial Accounting

9.

Performance Measurement and Responsibility Accounting

9.1.

Decentralization Concepts

9.1.1.

Definition and Types

9.1.1.1.

Geographic Decentralization

9.1.1.2.

Product Decentralization

9.1.1.3.

Functional Decentralization

9.1.2.

Advantages of Decentralization

9.1.2.1.

Faster Decision Making

9.1.2.2.

Management Development

9.1.2.3.

Motivation Enhancement

9.1.3.

Disadvantages of Decentralization

9.1.3.1.

Coordination Problems

9.1.3.2.

Duplication of Efforts

9.1.3.3.

Goal Incongruence

9.2.

Responsibility Accounting Framework

9.2.1.

Responsibility Centers

9.2.2.

Controllability Principle

9.2.3.

Performance Reporting Structure

9.3.

9.3.1.

Definition and Characteristics

9.3.2.

Performance Measures

9.3.2.1.

9.3.2.2.

Efficiency Measures

9.3.2.3.

Quality Measures

9.3.3.

Cost Center Examples

9.4.

9.4.1.

Definition and Characteristics

9.4.2.

Performance Measures

9.4.2.1.

9.4.2.2.

9.4.2.3.

Cost Management

9.4.3.

Transfer Pricing Issues

9.5.

Investment Centers

9.5.1.

Definition and Characteristics

9.5.2.

Capital Investment Responsibility

9.5.3.

Performance Measurement Complexity

9.6.

Return on Investment

9.6.1.

ROI Calculation Formula

9.6.2.

Components Analysis

9.6.2.1.

Net Operating Income

9.6.2.2.

Average Operating Assets

9.6.3.

9.6.4.

ROI Limitations

9.6.4.1.

Short-Term Focus

9.6.4.2.

Asset Valuation Issues

9.7.

Residual Income

9.7.1.

Residual Income Calculation

9.7.2.

Minimum Required Return

9.7.3.

Advantages over ROI

9.7.3.1.

Goal Congruence

9.7.3.2.

Investment Incentives

9.8.

Economic Value Added

9.8.1.

9.8.2.

EVA Calculation

9.8.3.

Cost of Capital Considerations

9.9.

Balanced Scorecard

9.9.1.

Overview and Philosophy

9.9.2.

Four Perspectives

9.9.2.1.

Financial Perspective

9.9.2.1.1.

Traditional Financial Measures

9.9.2.1.2.

Shareholder Value Creation

9.9.2.2.

Customer Perspective

9.9.2.2.1.

Customer Satisfaction

9.9.2.2.2.

9.9.2.2.3.

Customer Retention

9.9.2.3.

Internal Business Process Perspective

9.9.2.3.1.

Process Efficiency

9.9.2.3.2.

Quality Measures

9.9.2.3.3.

Innovation Metrics

9.9.2.4.

Learning and Growth Perspective

9.9.2.4.1.

Employee Satisfaction

9.9.2.4.2.

Training and Development

9.9.2.4.3.

Information System Capabilities

9.9.3.

Strategy Mapping

9.9.4.

Implementation Challenges

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10. Relevant Costs for Decision Making