Control
Strategic Control
Strategic
Control Methods
organization success
Encourages desired organizational behavior
Implementing
Planning
Control Cycle
Adjusting
Measuring
What is
Measured?
Meeting Budget
Customer Satisfaction
Production Efficiency
New Product
Development Rates
Inputs
Quantitative
Performance(Mostly
Financial)
Outcomes
Quantitative & Qualitative
Performance
Who is evaluated?
Traditional
Individuals
Functions
Responsibility
Centers
Individuals
Teams (Groups)
Cross-Functional
People
Traditional
Efficiency
Quality
Profits
Innovation
ROI
Creativity
Overall Company
Performance
Traditional
Internal
Macro Environment
Industry Environment
Internal
Capacity Management
Capacity is the potential or capability, of a set of resources to do work
of
Company A
Selling Price
Direct Mat.
Direct Labor
Var. Overhead
$20.00
$2.00
$1.00
$1.00
Company B
$20.00
$2.00
$6.00
$1.00
Required: Compute the gross margins on the product of each company. Assume
an annual volume of production and sales of 100,000 units; then 200,000 units.
Solution:
(100,000 Units)
Company A
Company B
Cost:
Variable Costs/Unit
Fixed Cost/Unit
6.00
Total Cost/Unit
Selling Price
$4.00
$9.00
15.00
$19.00
$15.00
$20.00
$20.00
$100,000
$500,000
(200,000 Units)
The only Change is Fixed
costs per unit
$7.50
$3.00
$1,700,000
$1,600,000
Cost-Volume-Profit Analysis
Break
Even
Point
Fixed
Costs
& Total
Costs
Line
of
r
P
e
r
it A
ea
r
sA
s
Lo
Revenue Line
Contribution
Margin
Activity Level