Responsibility Accounting,

Segment Evaluation, and

Transfer Pricing

Balanced Scorecard
Basis of evaluating responsibility center
Responsibility Center Manager Evaluation Techniques

Cost Center Manager Cost Variance Analysis

Revenue Center Manager Revenue Variance Analysis

Profit Center Manager Segment Margin Analysis

Investment Center Manager Return on Investment (ROI)

Residual Income Model
Economic Value Added (EVA)
Jerry Corporation gathered the following data relative to
Northern Division's performance:

Net Sales P 12,000,000

Costs and expenses 11,000,000
Average Operating Expenses 5,000,000
Desired minimum (or imputed) rate of
return established by management 15%
Average undustry rate of return 28%
Income tax rate
40%
Economic Value Added

Operating Profit After Tax (OPAT)* Pxx

Less: Minimum Income** xx
Economic Value Added (EVA) Pxx