Chapter 9

Responsibility Accounting and Performance Evaluation

Directed Reading Guide

1. Why do decentralized companies need responsibility accounting?
2. what is a centralized company?
3. what is a decentralized company?
4. List two advantages of decentralization:
5. List two disadvantages of decentralization:
6. A cost center manager is responsible for ___________________________.
7. A revenue center manager is responsible for ___________________________.
8. A profit center manager is responsible for _______________________________________________.
9. An investment center manager is responsible for _______________________________________________.

In MyLab Accounting, complete Try It! and S-M:9-1 and S-M:9-2.

1. What is a performance evaluation system, and how it used?
2. what is a performance evaluation system?
3. What is a lag indicator?
4. What is a lead indicator?
5. What is a balanced score card?
6. What are the four balanced scorecard perspectives:

1. What is KPI?

In MyLab Accounting, complete Try It! and S-M:9-3 and S-M:9-4.

1. How do companies use responsibility accounting to evaluate performance in cost, revenue, and profit centers?
2. _______________________________are performance reports that capture the financial performance of cost, revenue, and profit centers with a focus on responsibility and control.
3. __________________________ is a cost that a manager has the power to influence by his or her decisions.
4. Cost center responsibility reports typically focus on the ______________________________, the difference between actual results and the flexible results.
5. Revenue center responsibility reports highlight both the _______________________ and the __________________________________________.

In MyLab Accounting, complete Try It! and S-M:9-5.