Responsibility Accounting & Performance Measurement

Managerial accounting tools of responsibility accounting and other performance measures related to decentralization

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What you’ll learn

  • Managerial accounting concepts
  • Responsibility accounting system and how it can improve performance
  • How to define and apply direct and indirect expenses
  • How to allocate indirect expenses using different activity basis
  • Steps to create a departmental income statement
  • How to put together a forcasted departmental income statement
  • How to calculate and interpret return on investment (ROI)

Requirements

  • Understanding of basic accounting terms

Description

Responsibility accounting & performance measures.

We will describe the concept of decentralization, how it applies to businesses, and the pros and cons of a more decentralized organization from a centralized one.

The course will cover general managerial accounting concepts necessary to study responsibility accounting, comparing and contrasting managerial accounting and financial accounting.

We will explain what a responsibility accounting system looks like and the benefits of a responsibility accounting system.

The course will discuss the categorization of costs between direct costs and indirect costs and why this categorization between direct and indirect is useful for reporting financial data by department.

We will describe the problems with allocating indirect costs to the proper departments and explain various methods for allocating indirect costs.

The course will describe what a departmental income statement is and how to create a departmental income statement.

We will explore what a forecasted departmental income statement is and put together a forecasted departmental income statement.

The course will discuss other performance measures like return on investment (ROI) and a balance scorecard.

We will also complete a comprehensive problem using preformatted Excel worksheets and step by step instructional videos.

Author(s): Robert (Bob) Steele

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