Flashcards in Exam 5 Deck (11)
compares actual costs with budgeted costs.
Compare actual costs with the budgeted costs for the budgeted level of activity(created in advanced)
enables a firm to compute expected costs for a range of activity levels. The key is to know fixed and variable costs
Delegating decision-making authority to the lower levels of management in a company
-gathering and using information
-focussing of central management
-training and motivating segment managers
enhanced competition, exposing segments to market forces.
reasons for decentralization
refers to earnings before interest and taxes.
all assets acquired to generate operating income, including cash, receivables, inventories, land, buildings, and equipment.
the profit earned per dollar of investment.
return on investment (ROI)
s the difference between operating income and the minimum dollar return required on a company’s operating assets
is after tax operating income minus the dollar cost of capital employed.
economic value added (EVA)