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Flashcards in performance measurement Deck (11):
0

organizational architecture for performance measurement

decision right
performance measures
rewards

1

what are responsibility centers

cost centers
profit centers
investment centers

2

how to calculate ROI (evaluating investment centers)

segment margin / divisional operating assets

3

what's residual income

segment margin - required rerun on operating assets

4

what are relevant costs

expected future costs that differ among alternatives

5

what are relevant revenues

expected future revenues that differ among alternatives

6

what are opportunity costs

net benefit foregone by not choosing the best available alternative

7

what are sunk costs

irrelevant investments

8

when is the decision smart

it provides higher net benefits than the best alternative

9

what is the price for special offers

above relevant costs

10

if you have capacity constraints, give priority to alternative uses of capacity baed on....

contribution margin per unit of constraint