Accountants and business decision-makers who want to understand concepts related to measuring and tracking company performance could benefit from this course. The course allows participants to become familiar with tracking the performance of a decentralized organization as well as understanding the benefits and key pieces of both a Master budget and a Flexible budget. Below is a listing of the items covered within the course.
Learning Objectives
Performance Measurement and Responsibility Accounting
- Advantages and disadvantages of decentralized organizations;
- Performance evaluation using cost centers, profit centers, and investment centers;
- Controllable and uncontrollable costs and the use of responsibility accounting system;
- Direct and indirect expenses and the allocation of indirect expenses including examples for utility, advertising, rent, wages and salaries, equipment and machinery deprecation, and service department expenses;
- Department Income Statements and allocation of service department expenses under the direct, step, and reciprocal methods; and
- Investment center performance evaluation and other non-financial performance measures.
Master Budgets
- Discussion of budgeting benefits, timing, and components;
- Illustration of a Master budget components including:
- Operating Budget including budgeted sales, production, general and administrative expenses, and capital expenditures;
- The cash budget; and
- Budgeted Financial Statements including the Income Statement and Balance Sheet.
Flexible Budgets
- Fixed budget and Fixed Budget Performance Reports;
- Flexible budget including its purpose and preparation;
- Setting standard costs and calculating direct material, direct labor, and manufacturing overhead variances; and
- Illustration of a Flexible budget.