ABSTRACT
After studying this chapter, you should have developed an appreciation of
1. How organisations are sub-divided into responsibility centres
2. The four main types of responsibility centre
3. How to compute residual income as an alternative to using ROI when
measuring the performance of an investment centre
4. The importance of budgeting
5. The organisational roles that are served by budgeting
6. The behavioural implications of budgeting
7. How a purchases, production and labour budget schedule can be
prepared.
