Chapter11: Performance Measurement in Decentralized Organizations

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gabo
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189618
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Chapter11: Performance Measurement in Decentralized Organizations
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2012-12-15 12:31:07
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ACC 202
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  1. Balanced scorecard
    An integrated set of performance measures that are derived from and support the organization's strategy.(p. 485)
  2. Cost center
    A business segment whose manager has control over cost but has no control over revenue or investments in operating assets. (p. 474)
  3. Decentralized organization
    An organization in which decision-making authority is not confined to a few top executives but rather is spread throughout the organization. (p. 473)
  4. Delivery cycle time
    The elapsed time from receipt of a customer order to when the completed goods are shipped to the customer. (p. 482)
  5. Economic Value Added (EVA)
    A concept similar to residual income in which a variety of adjustments may be made to GAAP financial statements for performance evaluation purposes. (p. 479)
  6. Investment center
    A business segment whose manager has control over cost, revenue, and investments in operating assets. (p. 475)
  7. Manufacturing cycle efficiency(MCE)
    Process (value-added) time as a percentage of throughput time. (p. 483)
  8. Margin
    Net operating income divided by sales. (p. 476)
  9. Net operating income
    Income before interest and income taxes have been deducted. (p. 475)
  10. Operating assets
    Cash, accounts receivable, inventory, plant and equipment, and all other assets held for operating purposes. (p. 476)
  11. Profit center
    A business segment whose manager has control over cost and revenue but has no control over investments in operating assets. (p. 474)
  12. Residual income
    The net operating income that an investment center earns above the minimum required return on its operating assets. (p. 479)
  13. Responsibility center
    Any business segment whose manager has control over costs, revenues, or investments in operating assets. (p. 474)
  14. Return on investment (ROI)
    Net operating income divided by average operating assets. It also equals margin multiplied by turnover. (p. 475)
  15. Throughput time
    The amount of time required to turn raw materials into completed products. (p. 482)
  16. Turnover
    Sales divided by average operating assets. (p. 476

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