Compute return on investment (ROI) and show how changes in sales, expenses, and assets affect ROI
Compute return on investment (ROI) and show how changes in sales, expenses, and assets affect ROI.
Compute residual income and understand its strengths and weaknesses.
Compute delivery cycle time, throughput time, and manufacturing cycle efficiency (MCE).
Understand how to construct and use a balanced scorecard.
Identify relevant and irrelevant costs and benefits in a decision.
Prepare an analysis showing whether a product line or other business segment should be added or dropped.
Prepare a make or buy analysis.
Prepare an analysis showing whether a special order should be accepted.
Determine the most profitable use of a constrained resource.
Determine the value of obtaining more of the constrained resource.
Prepare an analysis showing whether joint products should be sold at the split-off point or processed further.
The word Performance being measured by a tape measure. In this Unit, we continue our coverage of performance measurement to include return on investment and residual income measures used to motivate managers and monitor progress. The balanced scorecard is also discussed.