Responsibility
accounting
卢静暖
徐润楠
武敏纯
邓会敏
PART ONE
divisionalisation
Divisionalisation
Functionally
decentralisation
structuring
organisations
Divisionally
Functionally
Operations
Managing
Director
Sales &
Marketing
Purchasing
Production
Finance
Marketing
Human
Resources
Accounting
Sales
Finance
Management
Distribution
Cost
Controlling
R&D
Recruitment
Information
Training
Research
Institute
Compensation
Health &
Safety
Divisionally
Production
Director
Product
Product
Product
Product
Computer
Computer
TV
TV
Sales &
Production
Marketing
Finance
Sales &
Production
Marketing
Finance
Advantages of divisionalisation
Improve the quality of decision
Free top management
Local conditions
Personal incentives
Strategic plan
Decisions should be taken more
quickly.
the chain of command
Decisions provide valuable training
ground for future members of top
management
Disadvantages of divisionalisation
(a) Interest conflict between segments
Prevent dysfunctional decision making
￭ decentralisation of authority
￭ retaining centralised authority
(b) Increase in costs of activities
common to all divisions
(c) Loss of control by top management
PART TWO
COST CENTERS
In performance report
for a cost center
1) Controllable cost and
uncontrollable cost
2) Flexible budget
A controllable cost is a cost
001which can be influenced by
management decision and
actions
003
Controllable costs and
uncontrollable costs
An attributable cost is a cost that
can be specifically identified with a
particular responsibility center
002
A uncontrollable cost is a cost which
cannot be affected by
management within a given time
Flexible budget
A flexible budget is a budget which recognizes
different cost behavior patterns and is designed
to changed as volume of activity changes
01
In the planning stage, it may be helpful
to know what the effects would be if
the actual outcome differs from the
prediction
02
At the end of each month or year, actual
results may be compared with the
relevant activity level in the flexible
budget as a control procedure
PART THREE
profit center
Profit center
Identify units of the organisations
001to which both revenues and costs
can be seperately attributed
002
It is a part of a business
accountable for both
costs and revenues
Internal sales are charged at a
notional selling price or transfer
price
Profit center
Sales revenue
Variable cost of sales
Contribution
Directly attributable fixed costs
Salaries
Stationery costs
Gross profit(directly attributable)
share of uncontrollable costs
Net profit
amount
X
(X)
X
X
X
X
(X)
X
• Contribution
• Directly attributable
gross profit
• Net profit
PART FOUR
investment center
01
Investment
centers 02
03
(range
rights resposibilities) Most
measure methods\check standards
more complicated
An investment centre is a profit centre
with additional responsibilities for capital
investment and possibly for financing,
and whose performance is measured by
its return on investment`.
CIMA DIFINITION
ROCE RATIO
= ROI RATIO
profit before interest and
tax ÷ captial employed
RI
RATIO
Add Your Text
Here
Residual Income = net
operating income after
taxes -required profit
= current assets current liability
Return on capital
employed
= Residual income rate×
invested capital
Return on
investment
Residual
income
THANK YOU