Smt. M. T. Dhamsania College of Commerce, Rajkot.

Year 2019-2020 (First Term)

INTERNAL ASSESSMENT
Marke Obt. Teacher's Sign.
Coune BAA Semoster: a 0t
Noll No14 Enrollment No. LQ1020121161 Divislon :
Assignmont:1, 2, 3, 4
Subject AccQunting far Manageial Decision
Name DadhaniyQ Tinal

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Assignment:1

Nhat is Responsithliis AccounL ? Hoo are.

Respansiblit4 ceniges deLeLmingd9

Accordinq to shri kohler Tt is a niethod

1Tuotn in cuhich c0sts are identifed ath peisans
assiqned tu their contucl cather than ith prcducts
aL Aunctians.

Accordinq to Rohert Anthan4, Responsibility is

that type af manaqcment acouatingq that coiects
and ceports botth planned and actual accaunt ing in
of deleqated responsibill44y centces. "

This fique shous the respansibilits centre

TnputS ock Qutput
Resaurces (Cucds or seruices 2

Each responnibilits centre uses inputs hich.

aLr ndtetials. Iahour and ather Seruices It caries on.
0Cth Oh theSe tesources eith the help af 155ets. The
cCiponsibilits centte then poduces Qutpui hich mas
be physical gocds Qr ahich may be serVices ike
traineering accountinq, administrative seruices tc,
Latter type of autputí Le difficuH t0 meaSUre,
 Thushe
cficiert coeratonE
4ctiut es for Ahicn autnciit is
heacd cf ccnsiderEd
esDcOSibe for the actiLtLS
Feports are prESented him in reaard te under
his ccnHolL Suh a depgrtrneot diuisicn cr sEcticn
ccnsiderecl
biqdeportmen iKe Soles department cr a Smo)
SeCtin ike Repair5 sectian cf pcduchen
cieari idtatifiahle
for manaaement and ccntrol and its performance
mus oeosurobie

Centres

A1 Erpense Centres cr cCEt CAOtreS

ErOease centres are re5pCn6ibil+u

oniz Qre measured

meeI0ru termS bur for abich mcnetor

COSt

CerotnsE Centre.

concern. thf

are crpense
CentrES C ccsi centIEE Accardina to Anthen
EIDE05e entre S oat thê SOme
CentE iSA deuice used
CeotCs
to be,

4 cost cf pIcductian Anile the chiectE

is5to contiol
 Assignmoent : 2

Howeuer an cLpense ccntue is nat uáeful

basis f mcasucing pcrfor mance cf
Tespansibiliiy
CenttC be cause it does 1ake inia accaunt the
auiQu of thecente. Haueucr herê cutput is
department
This is the mast suitable. rm of centre.

Reuene Centtes -

Ceenue centre S one ohere outputS Qre

nnça_ured in noneiary tecm5. but nc formal
ottenipt is Made to measure erAenses, The nandaer
af such a cespan sibilts centteS have no pCcuers t0
make ans decision reqarding inuestnients or casts
ta he nade He is esponsib le onls for his centre,
Thus mcrketing arganisaiions qre Uch Ceuenue.
Ceotres. In order to Eualu Qte the necformance.
Centt e. the act uo reuenues are campared in
the Sanme
centre5 do not
hove the Qutherits to set selling prices
Prcft Centres 2

Nhen the mandqer t a

LiS eSpcnsibilits cente
conSidered respcnsible fr costs or CIAenses and
alsa eLenues Qutput of that centre it i called
rri CEni e Tn other mords if the perfor mance
tESpon5ible Cendrês Inter cf both
hen finoncial perfar mance in a
in
responsibility cenire
tcms cf proft.
hich is dicference betceen the reuenues and
epenSeS the cespcnsibils Cenire is called a
Centre
 A prcfit centre mas be say 4 praduct
iuisian which may be. ccsponsiblc far
itsinput
S0 iS
ike
and
an
far ts
JdCntical
putput
icM 5 Uch
cobich is
a ccnttC is
proft Centre Cohere both input Cund
Qtput CCLN_ be AIeaSured
against thcd. there may he consirucupofit
Centes. input mas he mneaLsurable but
Cutput /s not as it cloes not sell anything
Er 4he cniputer SeciiQN This is actuallty cost
Cende 05 it prauudes 5erViceS to other departneoi
and SeCUiCes tO 1he
managementmas canslder itS constructiue prefi+
ohich is notreal profit but the cost ohich it
Saued b huing complter Seruices As it /s a

diuisional profit and tqT is payable

Arm'sprofit Profit centres ha5 it5 oCon aduontaqeS
and limitatons also.

D) Investment

Tnuestment cenires is a responsibilit

centre in uhich inputS are measured intems
ofcosts. and outputS are meaSUred in tems
ohich a55ets
Of reuenues Cnd in
emplayed
al5o measured. shena diuisional mandger is
cloued pocues ab0ut the amaunt is
undertaken h4 the diuision then such diuision
aLe inuEStnLent Captal Emplo;ed cROCE )
Knounas Return on TODeSment CROT)
by Aesidual Toconc.
 Assignment: 3

Anthan and Reece Cwrte,

AsRobert
Centre
"An inuC5tnient Cente isa respansibility
ahichhe mandger is heldrcspoDsihe for
theUSe of asSet5. as well as for reuehLes and
centr& the manager
returo the.
is erpccted t0 eorn a sctisfactory
as5ets emploued in hìs tesponsibì lit4 Cente. The

Subsidiaríes are allowed ta moke

nanagers af 5uch
about ne uolume of procChon and
decisions.
ahout the prices of theAroducts.

Love5tment centes are used qenarally

by relotiue ly late companie s for thcir bl divisions
auhich both manufactre and a líne of product.
market
But the Linitatton S of nueStment Centres are similar
4hose of
profit Centtes.Egc there is anincrease
af record keeping Gecondl manages ae
interested in short-unprofi+s and 50 +hes toke
decisions ohicthe are not Consi5tent Ciththe long
un best inteest5 of the compant mhole

Discus5 Merit5 andDemerits of

Respansihiliy
ACCauniing
Mecits af Respansibilits dcrointing

I provides a useful toal to the management far

Contto
The ceficiency and profitabilit
and Small depcirt meni Sectians are a vCilo ble
fonn Slch reports.

IA helps in eNaluating the per fur mance cf diuisiona

managers in an ohjecwe Theirper frmCuDces
Ore commpared oith realistic taC ets in aduance
carefuls by the top manaQemen
 In ccde to appraisc Lhe pcda niancc. hc gol of
buLsiness aLalu he deLCLmincd and cau:Culls
pLcpaed cealiáthc laçqc.LsQre ta hc flxcd Ihus
t coDipelS tap nianagcmcDts t0 do 60.
Under
têsAcnsibìits acauntinq decision niaking is
delcated to Dianages of cesponsl bility accauniins
his hclps in
decentalisatian of eneLpisC.
5 Cast ccnsciauness deuelaps amandiuiso
WheneLEL thCypLesent. nalnandgcrs.
apraposal,
always analsse. COSt benefiA they
aspcct aP it.
6IH 0nipLOues duGr-al cficiencs ol businef as the
performance teportS dre
proniptiy prescDtcd dnd
coLLectiue aciians aLetaken in Lime belare too lcte.
4 Leads to impraued eflicicncs In yel
As thc
perfoIance tepartS re piescntcd anothcr
uC;
ay.
ch
ta tìme befort
thediuisianal
haue chaugh data before then inaers, hcs
an thc basis of
Ahich thes takc
their dccisions. Thus,
making deleqated to him becomes dccision
de cisions are scientífic Thesc
matured.
& It is a meti
uctinq techniques far diuisional nanaqers
Aesenting thc performance teports af their
0culd cncauraqe thenn t0 diuision
thcir
aLe heinq achieued. turgets
 Assignment: 4

imitations cf Respansibiits Accaunting i

If the top managemcnt docs naL hedclily Supparts
the sysiem. it ui fail Tastead af matiuatin thc
isional maage.cs, it cil delhelap hltter feelings

JF the arganisatíon struckure j5n0t properly organised,

there cuoulo he imbalance in delegation af authority
bose aleak
and cesponsibilit Thus. the

The tarqets fiTed miust be realistic Tf the targets

ace too high.it cuill discoutqe diuisional ma nager apdL
auould not dchieue its goal of maAuating managers.

e The defectiue ceporting S451emn o haue aduerSe

repret cUSsions. Go also not pLesenting reports. in
time a discouuage the aperating managets. They
not be able to making timels cor rectiue measutes

-4 Excplain concepf. af diuísional_ performance mea51Ur ment..

Measuring performance of a Dìuision is an

important rnanagement tool USed for
The chjectiues of the business have tocantrol purp0Se
be considered
while deciding hous to meaSue the
a diuision T£ the mgin
performance cf
is to matimize
Qhectiue of the business
profit then each departmfht's
heaSILed i n termo5 of profit contributecl by
CÆthem each