Responsibility Centers:

Revenue and Expense

Centers
 Implementing strategies made by management

Nature
 Direct &
Causal
Indirect
Relations:
Input &
Output
 Measuring Input

Measureme
nt of Input
& Output Measuring output is harder than measuring input,
thus most companies dont try measure the value.
 Ratio of Output per Input
Efficiency Efficient if input is minimum,
yet more output is produced

Efficiency & The more output contributes to

Effectivene objective, the more effective
Effectivenes ss the unit
s Hard to be quantified

Efficient: Doing things right

Effective: Doing the right things
 Revenue Output measured in
Centers monetary terms

Expense Inputs are measured

Types of Centers
Responsibili Both revenues (Output)
ty Centers Profit and Expense (input) are
Centers measured
Investme Relationship between
nt profit and investment are
measured
Centers
 Output is measured in monetary terms, no formal
Revenue attempt in relating input or output
Typically marketing or sales unit
Centers Can be measured with quota and budgets as well
 Their input can be measured in
monetary terms
Engineered Their output can be measured in
Expense physical terms
The optimum dollar amount of input
Centers required to produce one unit of output
can be determined

Expens Disdirectiona The output can not be

ry Expense measured in monetary
Centers Centers terms

General Budget Preparation

Control Cost Variability
Characteristic
Type of Financial Control
s
 Control
Administrati
ve and Problems
Support
Centers Budget
Preparation
 Control Problems

The R&D Continuum

Research
and
R&D Programs
Developme
nt Centers Annual Budgets

Measurements of Preformance
 Mar
Logis keti
Marketing tic ng
Activi Acti
Centers vitie
ties
s
 Vershire Company adalah perusahaan pengemasan,
yang pada tahun 1996 terdiversifikasi dengan
berbagai divisi besar. Salah satunya yaitu divisi
Aluminium Can, perusahaan produsen kaleng
minuman dari aluminium terbesar di Amerika Serikat.
Dalam menjalankan bisnisnya, pertumbuhan
penjualan divisi Aluminium Can melebihi
Case Study: pertumbuhan penjualan dalam industri tersebut.
Vershire Bahkan, Aluminium Can sampai menyebarkan
pabriknya diluar Amerika Serikat, dimana setiap
Company pabrik melayani kebutuhan konsumen yang berada
dalam area layanannya, juga memproduksi berbagai
ukuran kaleng yang meliputi tempat pembuatan bir
dan botol minuman ringan. Dalam struktur organisasi
Veshire Company, General Manager diberikan kendali
penuh atas bisnis dengan pengecualian:
Pertumbuhan modal dan hubungan tenaga kerja.
Discussion
Results:
The
strenght
adn the
weakness of
Vershire
Companys
planning
and control
system
Discussion
Results:
Responsible
for profits
 Increase To maximize information & resource
communication sharing
between divison To facilitate budgeting process
Discussion managers

Results: Change So that managers are more

Redesigning compensation
system and
motivated to maximize profit by
using cost
Manageme reassignment
over profit
To achieve goal congruence
nt Control
Structure Improve
comparison of
To help contribute in corporates
bottom line
manufacturing Make an example out of the most
efficiency
efficient division
between divisions