Presented by: Mahesh Pandey MBA

Responsibility Accounting is a management system that aims to develop performance measures by which segment managers are evaluated. The essence of responsibility accounting is to communicate the right information to the right person at the right time.

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Relating to theresponsibilities ofindividual managers.To evaluatemanagers oncontrollable items.An accounting system thatprovides information . . .

A subunit in an organization that is headed by a responsible manager.

Under responsibility accounting responsibility centers are broadly categorized as:

Cost centers segments whose managers are held responsible only for costs but not for revenue or investments.

Revenue centers- segment is responsible for the revenue of particular unit or center.

Profit centers segments whose managers are held responsible for both costs and revenues but not for investments.

Investment centers segments whose managers are held responsible for the capital invested as well as the profits made in the segment.

Cost Center Segment has control over the incurrence of costs.The Paint Departmentin an automobile plant.

Profit Center Segment has control over both costs and revenues.Company-owned restaurant in a fast-food chain.

CoststandardsContributionincomestatementRate of returnon investedfundsEvaluation Tool

CostResponsibility Reports

Responsibility Reports Prepared for each individual who has control over revenue or expense items

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