Quiz 24: Performance Eva Uation for Decentra Ized Operations

Comment on H's reactions: • 'R' Company includes two divisions which are semiconductor divisions and x-ray divisions for which D.D and H.H are the controller's respectively-ray dimensions requires semiconductors from semiconductors divisions with reduced price as semiconductor divisions were unable to market 10% of their semiconductors the previous year. • Definitely D.D the controller of the x-ray division behaved in an ethical and in a philosophical manner by trying to force the semiconductor division for a price break.if both the controllers arrives to a deal ,there would not be any stock left over and x-ray division no need to purchase the products for high price. The deals satisfies both the conditions by improving sales and fetching profits as both the departments works for one same company. • H.H, the controller of the semi-conductor division is awkward and grim in his approach and reaction. H.H was so stubborn and stringent in looking at his personal aspects instead of organization's welfare and integrity.

Difference between Centralized Operations and Decentralized Operations

Cost center Cost center is a decision making unit pertaining to an entire manufacturing or a service rendering company. There might be many cost centers inside a cost center. Managers of cost centers are usually held responsible in controlling costs of the cost centers of a firm. Example: • Production department of a car manufacturing company • Admissions department of a hospital A) Budget performance reports for cost centers Maguire Company Budget Performance Report - Vice President Production for the month ended May 31 st 2014 Maguire Company Budget Performance Report -Manger South Region, Plant for the month ended May 31 st 2014 Maguire Company Budget Performance Report - Supervisor, Chip Fabrication for the month ended May 31 st 2014 Comparison of division incomes is not possible as the divisions might vary in terms of different attributes like number of customers, products, size of the market and others. However each division income has to be compared with the budgeted income. B) MEMORANDUM Maguire Company, California, USA, 3-07-2014 To : Holley Keller, Vice-president of Production, Maguire Company From : ABC, Finance executive, Maguire Company Subject: Performance of the production division during the month of May, 2014 I would like to present you the details of the production departments of chip fabrication, electronic assembly and Final assembly during the month of May 2014 for the three plants of Maguire Company namely Mid- Atlantic, West and south regions of USA. The chip fabrication department of south region was over budgeted by $ 2,832. The expenses of factory wages, power and light and maintenance were over budgeted by $ 1,152. The materials expenses were only under the budget. So, all these budgeted expenses must have to revise before preparing budget for the upcoming month of June 2014. However the expenses of Mid-Atlantic region and west region are predicted according to the requirements as they are under the budget estimates for the month of May 2014. I would here by inform you that we would estimate the expenses of the South region in preparing the budget for the month of June 2014 by reviewing the actual expenses incurred during the month of May 2014. ABC, Finance Executive Maguire Company

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