Scribd Logo
Upload

Welcome to Scribd!

  • The Concept of Responsibility Accounting

    Uploaded by

    terrence jacob diama
    11 views18 pages
    Responsibility accounting involves dividing an organization into small responsibility centers and assigning revenue and cost responsibilities to each center. The performance of each center is then measured against predetermined targets. It aims to support centers within a company by helping with costing and planning through preparing annual or monthly budgets allocated to each center. After a period, each center's performance is evaluated by comparing it to its targets, and remedial measures are adopted for centers above or below targets.

    Original Description:

    Original Title

    final-PPT-R-A

    Copyright

    © © All Rights Reserved

    Available Formats

    PPTX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    Responsibility accounting involves dividing an organization into small responsibility centers and assigning revenue and cost responsibilities to each center. The performance of each center is then measured against predetermined targets. It aims to support centers within a company by helping with costing and planning through preparing annual or monthly budgets allocated to each center. After a period, each center's performance is evaluated by comparing it to its targets, and remedial measures are adopted for centers above or below targets.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    11 views18 pages

    The Concept of Responsibility Accounting

    Uploaded by

    terrence jacob diama
    Responsibility accounting involves dividing an organization into small responsibility centers and assigning revenue and cost responsibilities to each center. The performance of each center is then measured against predetermined targets. It aims to support centers within a company by helping with costing and planning through preparing annual or monthly budgets allocated to each center. After a period, each center's performance is evaluated by comparing it to its targets, and remedial measures are adopted for centers above or below targets.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 18

    The Concept of Responsibility Accounting

    “When people feel accountable and included, it is more fun.” – Alan Mulally
    ResponsibilityAccounting
    Maybe known as decentralization of responsibility
    center so that desired control can be ensured and
    thereby the goal of the organization can be attained.

    Responsibility Accounting
    involves the following.
    1. Entire organization is divided into small
    responsibility centers.
    2. In terms of Revenue and cost, the
    What does it mean to be responsibility of each cost centers is
    accountable? fixed.
    3. In terms of its predetermined target,
    To be accountable means to be responsible or the performance of each responsibility
    answerable to someone for something. It involves
    taking responsibility for your own actions and being
    center is measured
    able to explain them. TREY 2
    research
    HOW TO IMPLEMENT R/A IN A COMPANY
    Objectives of
    Responsibility 1. Overall organizational goals are broken
    down into small goals, each of the small
    Accounting goal is meant for better achievement of
    responsibility center.

    2. With the attached responsibility, each


    The main and crucial objective is to support responsibility center is tied up and there is
    all the centers within the company and help adequate authority so that responsibility
    them with costing and planning. can be discharged
    The accounting we referred to above relates 3. At the end of a period, evaluation is done of the
    to the preparation of annual or monthly performance of its responsibility center and
    budget which is allocated or comparison of the performance is done with the
    designed for any particular center. predetermined targets.

    4. Thorough study is made of the achievement which


    are above or below target and remedial measures
    are adopted. TREY 3
    research
    TheConceptofResponsibilityAccounting
    TheConceptofResponsibilityAccounting
    TheConceptofResponsibilityAccounting
    Large image

    TREY 7
    research
    The 4 Resposibility Centers of
    Responsibility Accounting

    Add a footer TREY 8


    research
    TheConceptofResponsibilityAccounting
    TheConceptofResponsibilityAccounting
    TheConceptofResponsibilityAccounting
    TheConceptofResponsibilityAccounting
    TheConceptofResponsibilityAccounting
    ROI

    • ROI= operating income/operating asset (investment)


    Sales
    -Total expense
    Operating income

    TREY
    research
    Residual income

    Sales
    - Total expense
    Operating income
    -Imputed interest
    Residual income

    TREY
    research
    Sample of RI and ROI
    Table 1.1 Table 1.2
    Alaskan Marine Service AMC kitchikan Division
    Corporation Alternative Performance Measures
    Kitchikan Division
    Basic Data for Performance ROI (a/b) RI
    Evaluation AOA(a) P100,000 P100,000

    Ave Operating Asset……P100,000 NOI(b) P20,000 P20,000


    Net Operating Income…..P20,000 20%
    Minimum Required rate of return.. MRR 15% - 15,000
    15%
    RI P3,000

    TREY
    research
    Table 1.2 Table 1.3
    Alaskan Marine Service Corporation Alaskan Marine Service Corporation
    Kitchikan Division Kitchikan Division
    Using Performance measures using RI Using ROI

    Present New Overall Present New Overall


    Project Project
    AOA P100,000 P25,000 P125,000 AOA(a) P100,00 P24,000 P125,00
    0 0
    NOI P20,000 P4,500 P24,500
    MRR 15% P15,000 P3,750 P18,750 NOI(b) P20,000 P4,500 P24,500

    RI P5,000 P750 P5750 ROI, b/a 20% 18% 19.6%

    The AMC adds new project which


    purchase them a machine that
    would cost P25,000 that would
    expect them to generate of
    income P4,500
    TREY
    research
    ThankYou
    Rap Novem J. Decir

    TREY 18
    research

    You might also like