Accounting for Managers: Interpreting accounting information for decision-making
PERFORMANCE EVALUATION OF BUSINESS UNITS 197 with this approach is whether a high rate of return on a small capital investment i ...
198 ACCOUNTING FOR MANAGERS One of the main problems in evaluating divisional performance is the extent to which managers can ex ...
PERFORMANCE EVALUATION OF BUSINESS UNITS 199 taken out, that was relevant. The investment value, according to Solomons, should b ...
200 ACCOUNTING FOR MANAGERS than the current ROI of 10%. The effect would be to increase Division B’s ROI slightly to 10.14% (£2 ...
PERFORMANCE EVALUATION OF BUSINESS UNITS 201 Table 13.4 RI on additional investment AB Additional investment £1 million £1 milli ...
202 ACCOUNTING FOR MANAGERS Table 13.5 Divisional financial results Activity 10,000 12,000 15,000 Division A 10,000 units 100,00 ...
PERFORMANCE EVALUATION OF BUSINESS UNITS 203 Table 13.7 Division B costs 10,000 12,000 15,000 Division B total costs 430,000 486 ...
204 ACCOUNTING FOR MANAGERS co-ordination occur within the organization’s hierarchy (i.e. within the corporate structure), while ...
PERFORMANCE EVALUATION OF BUSINESS UNITS 205 Recurring, complex and uncertain exchanges that involve substantial invest- ment ma ...
206 ACCOUNTING FOR MANAGERS concerned with how to shift profits between countries so as to minimize income taxes on profits and ...
14 Budgeting............................................ Anthony and Govindarajan (2000) described budgets as ‘an important tool ...
208 ACCOUNTING FOR MANAGERS žmotivate managers to achieve targets; žprovide a means to control activities; and ževaluate manager ...
BUDGETING 209 expenses etc.). Senior managers set the revenue targets and spending limits that they believe are necessary to ach ...
210 ACCOUNTING FOR MANAGERS žany new initiatives or projects that are planned and require resources; žthe headcount and historic ...
Table 14.1 Service budget example: Superi or Hotel – budget statistics Superior HotelBUDGET STATISTICS Explanation Lastyear Curr ...
Table 14.2 Service budget example: Superior Hotel budget SUPERIOR HOTEL BUDGETINCOME Explanation Lastyear Current year Qtr 1 Jan ...
BUDGETING 213 Table 14.3 Sports stores co-operative sales and expenses estimate Jan Feb Mar Apr May Jun Total Sales (in £’000) 7 ...
214 ACCOUNTING FOR MANAGERS In Table 14.4, for example, the inventory required at the end of February (£48,000) is the cost of s ...
BUDGETING 215 Table 14.6 Telcon Manufacturing budget in £’000s Jan Feb Mar Apr May Jun Total Sales units 1,000 1,100 1,200 1,200 ...
216 ACCOUNTING FOR MANAGERS Table 14.8 Telcon Manufacturing materials budget Jan Feb Mar Apr May Jun Total Total units to be pro ...
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