(a) Prepare a performance report for the manager of the Deluxe Division. (b) What is the best measure of the manager’s performance? Why? (c) How would the responsibility report differ if the division was an investment center?
The Deluxe Division, a profit center of Riley Manufacturing Company, reported the following data for the first quarter of 2016:
Sales $9,000,000
Variable costs 6,300,000
Controllable direct fixed costs 1,200,000
Noncontrollable direct fixed costs 530,000
Indirect fixed costs 300,000
Instructions
(a) Prepare a performance report for the manager of the Deluxe Division.
(b) What is the best measure of the manager’s performance? Why?
(c) How would the responsibility report differ if the division was an investment center?
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