Introduction ◆ Is it correct ◆what’ s your comment to the manager’ s decision? After learning this chapter, you will know how to employ the tools of managerial accounting and ma ke decisions 2 correctly. Task Team of FUndaMientalactoUntING Business Sehool. Sun Yatsen niversity 6
6 Introduction ⧫ Is it correct? ⧫ What’s your comment to the manager’s decision? ⧫ After learning this chapter, you will know how to employ the tools of managerial accounting and make decisions correctly
Segmented Reporting Q Organizations may break down their operations into various segments I divisions, stores, services, or departments. Q Management needs reports on each segment for n cost management n performance evaluation Task Team of FUndaMientalactoUntING Business Sehool. Sun Yatsen niversity 7
7 Segmented Reporting ⧫Organizations may break down their operations into various segments divisions, stores, services, or departments. ⧫Management needs reports on each segment for cost management performance evaluation
Segmented Reporting A Segments may be evaluated as u a cost centre D a profit centre profit centre reports include information on a segments revenues and costs. u an investment centre Some costs are direct and some are indirect n Indirect costs may be allocated to various departments. Task Team of FUndaMientalactoUntING Business Sehool. Sun Yatsen niversity
8 Segmented Reporting ⧫Segments may be evaluated as a cost centre a profit centre →Profit centre reports include information on a segment’s revenues and costs. an investment centre. ⧫Some costs are direct and some are indirect. Indirect costs may be allocated to various departments
Segmented Reporting Q Service department costs are shared indirect expenses of operation departments. Q They may be allocated using a variety of bases. Service De partment Common Allocation Bases General office Number of employees Personnel Number of employees Payroll Number of employees Adve rtising sales Purchasing Number of purchase orders Cleaning Floor space occupied Maintenance Floor space occupied Task Team of FUndaMientalactoUntING Business Sehool. Sun Yatsen niversity 9
9 Service Department Common Allocation Bases General Office Number of employees Personnel Number of employees Payroll Number of employees Advertising Sales Purchasing Number of Purchase Orders Cleaning Floor space occupied Maintenance Floor space occupied Segmented Reporting ⧫ Service department costs are shared indirect expenses of operation departments. ⧫ They may be allocated using a variety of bases
Responsibility Accounting System o Responsibility Accounting System n An accounting system a assigns managers the responsibility for costs and expenses under their control Task Team of FUndaMientalactoUntING Business Sehool. Sun Yatsen niversity 10
10 Responsibility Accounting System ⧫ Responsibility Accounting System An accounting system assigns managers the responsibility for costs and expenses under their control