Accountants and business decision makers who wants to understand concepts related to measuring and tracking company performance could benefit from this course. The course allows participants to become familiar with tracking 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 budgets 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.