Question

How can/should responsibility center managers department decision making performance be properly evaluated. Also, as it relates to variance analysis, standard costs, cost volume profit analysis, and efficiency, discuss the impact that company bonuses can/should have on responsibility center managers decision process.

Answer 1

Responsibility center is a divide and organised unit which is handle by the responsibility manger. responsibilities manger divide the Complete organisation into small unit and fixing the responsibility of each unit. head person of division is responsible for the favorable or unfeverable variance..manager take the decision according to the standard performance and the actual performance. firstly manger evaluate the actual performance and then compare with the compare with the standard performance. If manger find unfeverable variance then try to find out reasons for the unavailable variance.

variance anlysis is a technic for the evaluate the performance. In this process firstly set the standard for the performance.after this manger calculate the actual performance and actual performance compar with the standard performance and find out the variance. if the cost of actual performance is greter then standard it called unfeverable variance v/s called feverable variance.

Standard cost :Standard cost is also a technic for evaluate of performance. similar first set the standard and compar with the actual cost.

Cost volume profit analysis : In this technic set a terget for achieving a specific volume of profit. for achieving this target all unit are responsible.

All are these technic for the measure of performance. positive performance of company effect the company in positive way. share price and goodwill of company increase in the market. also the effect of the total welth of company.