• Unit 9: Performance Evaluation

    This unit describes how businesses use managerial accounting to evaluate company performance for the entire company, organizational departments, and individual employees. How do you evaluate the productivity of each division manager in a decentralized company? How well does each division use the company's assets to create profits? Responsibility accounting assumes someone is responsible for every cost the company incurs. It often bases the compensation given to managers on the financial performance of the divisions they manage. We will consider the issues Game Products encounters when it evaluates the performance of three divisional managers who oversee sporting goods, board games, and computer games.

    Completing this unit should take you approximately 3 hours.

    • 9.1: Control Operations in Decentralized Organizations

    • 9.2: Establishing Responsibility Centers

    • 9.3: Evaluating Investment Centers

    • 9.4: Wrap-Up

    • Unit 9 Assessment

    • Unit 9 Conclusion

      In this unit, you learned how to apply management accounting techniques to decentralized organizations. The main focus was on evaluating investment centers using techniques like the development of a segmented income statement, and applying performance metrics to these segmented accounts. In the next unit, you learn how to prepare a cash flow, one of the most vital management accounting tools.