Professional Documents
Culture Documents
Perspective
by Weihrich and Koontz 11th Edition
E.S. BIO
CONTROLLING
CONTROLLING
4.
3.
2.
1.
Setting performance
standards
Measuring actual performance
Comparing performance with
the standard vs. actual, and
determining deviations
Remedying unfavorable
deviation by taking corrective
action
CONTROLLING
PROCESS
CONTROLLING
PROCESS
Standards
ESTABLISHMENT OF
STANDARDS
If
MEASUREMENT OF
PERFORMANCE
6.
5.
4.
3.
2.
1.
CORRECTION OF
DEVIATIONS
1.
Physical Standards
Nonmonetary measurements and are
common at the operating level, where
materials are used, labor is employed,
services are rendered, and goods are
produced.
May reflect quantities, or qualities;
such as labor-hours per unit of output
and fastness of a color, respectively.
2.
Cost Standards
Monetary values & measurements
and, like physical standards, are
common at the operating level.
TYPES OF CRITICAL
POINT STANDARDS
3.
Capital Standards
Application of monetary
measurements to physical items.
TYPES OF CRITICAL
POINT STANDARDS
4.
Revenue Standards
Arise from attaching monetary
values from sales.
TYPES OF CRITICAL
POINT STANDARDS
5.
Program Standards
A manager may be assigned to install a
variable budget program, a program
for formally following the
development of new products, or a
program improving the quality of
a sales force.
Although some subjective judgment
may have to be applied in appraising
program performance, timing and
other factors can be used as objective
standards.
TYPES OF CRITICAL
POINT STANDARDS
1.
TYPES OF CONTROL
4.
3.
2.
TYPES OF CONTROL
They
MANAGEMENT AUDITS
Budgeting
(or budgetary
control) the process of finding
out whats being done and
comparing the results with
corresponding budget data to
verify accomplishments or to
remedy differences.
BUDGETING
3.
2.
1.
Sales Budget
Usually data for the sales budget that are
prepared by month, sale area, and product.
Production Budget
Commonly expressed in physical units,
required information include types and
capacities of machines, economic quantities to
produce, and availability of materials.
Cost Production Budget
Information is sometimes included in
production budgets, comparing production
cost with sales price shows whether or not
profit margins are adequate.
TYPES OF BUDGET
5. Master Budget
4. Cash Budget
TYPES OF BUDGET
3.
2.
1.
FINANCIAL CONTROL
FINANCIAL STATEMENTS
Total assets
Less depreciation
Total fixed assets
Fixed assets:
Land
Buildings and fixtures
Current assets:
Cash
Accounts receivable
Inventory
Total current assets
Assets
200,000
250,000
1,000,000
$25,000
75,000
500,000
$1,650,000
1,050,000
$600,000
260,000
540,000
Retained earnings
350,000
250,000
Long-term liabilities:
Mortgages payable
Bonds outstanding
$200,000
20,000
30,000
$1,650,000
800,000
$600,000
$250,000
Gross sales
Less sale returns
Net sales
Less expenses amd cost of good sold
Cost of goods sold
Depreciation
Sales expenses
Administrative expenses
Operating profit
Other income
Gross income
Less interest expense
Income before taxes
Less taxes
Net income
165,000
80,000
2,110,000
60,000
200,000
90,000
INCOME STATEMENT AN
EXAMPLE
$215,000
380,000
2,460,000
440,000
20,000
460,000
2,900,000
3.
2.
1.
Acceptability to Employees
CHARACTERISTICS OF AN
EFFECTIVE CONTROL
SYSTEM