MGST 391 Lecture Notes - Fixed Asset, Fixed Cost, Variable Cost

• School: University of Calgary
• Department: Management Studies
• Course: MGST 391
• Professor: Ahmad Ali Sohrabi

Document Summary

Performance appraisal: revenue, profits, assets, cash flow, roce/roi, market share, number of employees, number of products. 4 profit concepts to measure performance of divisions: Controllable profit ( sales - variable costs - fixed cost controllable) Controllable margin ( controllable profit other costs directly traceable) Net profit/margin ( controllable margin allocated service center costs and general management overhead) Value added is cost of material and bought in service. Measuring performance of profit center: roi/roce, residual income (measure of center"s profit after deducting notional or imputed interest cost) Benchmarking is establishment of targets and comparators (through data gathering) through which relative levels of performance can be identified. Internal benchmarking comparing one operating unit with another within same industry. Functional benchmarking internal functions compared with best external regardless of industry. Competitive benchmarking information about direct competitors is gathered through techniques e. g. reverse engineering. Strategic benchmarking aimed at strategic action and organizational change.