Performance Measurement

This topic has 1 reply, 2 voices, and was last updated 5 years ago by John Moffat.

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August 24, 2020 at 4:44 am #581692
danisha5
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How do I calculate controllable profit? Also, for verification is residual income calculated using the following formula: RI=Controllable Profit?(Minimum Required Return×Cost of Operating Assets)
August 24, 2020 at 8:54 am #581725
John Moffat
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The controllable profit is the sales less the costs that are controlled by the divisional manager (as opposed to being controlled by head office).The formula is correct and is all explained in my free lectures.
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