Westport Electric Corporation

Only available on StudyMode
  • Download(s) : 1372
  • Published : March 15, 2013
Open Document
Text Preview
Management Control System

RESPONSIBILITY CENTERS:
REVENUE AND EXPENSE CENTERS
CASE 4-5. WESTPORT ELECTRIC CORPORATION

Disusun Oleh:
AVRODYTA ANDRIANTI - 120910006

ACCOUNTING DEPARTEMENT
FACULTY OF ECONOMIC AND BUSINESS
MA CHUNG UNIVERSITY
2013
TABLE OF CONTENT

Page
COVER ………………………………………………………………………i TABLE OF CONTENT ………….…………………………………………ii CHAPTER I. INTRODUCTION
1.1.Background of Case Study Selection …………………………….......1 1.2.Motivation ………………………………………………….………....2 1.3.Research Question ……………………………………………...…......2 1.4.The Aim / Objectivity …………………….……….…………………..2

CHAPTER II. LITERATURE REVIEW
2.1.Responsibility Centers ………………………………………….........3 2.2.Efficiency ………….…........................................................................3 2.3.Types of Responsibility Centers ……………………………...….…..4 2.4.Budget …………………………………………………………….…6 2.5.Organizational Chart ………………………………………………....6

CHAPTER III. CASE ANALYSIS
3.1.Background Case (Westport Electric Corporation ……………….…..7 3.2. Case Study Analysis (Westport Electric Corporation) …………..…....9

CHAPTER IV. CONCLUSION
4.1.Conclusion ……………………….………………………………..…..11 4.2. Recommendation ………………….......................................................11

REFERENCES ………………………………………….…………………..12 CHAPTER I
INTRODUCTION

1. Background of Case Study Selection
An organization must have a goal to be achieved. To achieve those goals companies must be able to determine what strategy will be used in achieving these goals. The company can be considered as the responsibility centers if there is a manager who can take responsibility in managing the company. The company must be able to monitor the effectiveness and assess the performance of each manager. To help companies conduct performance evaluation that is needed is considering specific character of each responsibility centers. Researchers interested in conducting research in the Westport Electric Corporation because researchers want to learn more about the responsibility centers in the company. And Westport Electric Corporation is one of the companies that have responsibility of revenue and expense centers. The operating activities of the corporation are divided into four groups, each headed by a group vice president. These groups are: the Electrical Generating and Transmission Group, the Home Appliance Group, the Military and Space Group, and the Electronics Group. Each of these groups is comparised of a number of relatively independent divisions, each headed by a divisional manager. The division is the basic operating unit of the corporation, and each is a profit center. The divisional manager is responsible for earning an adequate profit on his investment. There are 25 divisions in the corporation. Due to too many divisions existing in the company, the company had difficulty in determining a budget. So the result make discrepancy of budget. The company gained revenue from product sales and investment results. While expenses must paid by the company are professional salaries, clerical salaries, supplies, consulting services, utilities, and so forth. In the Westport Electric Corporation, researchers found a problem that too many divisions that exist in the company. So the company have difficulty in determine the budget. And an increase in expenditure proposed by the staff of the administration offices. These improvements could not be justified. The glaring discrepancy eventually led to the existence of a budget within the company.

2. Motivation
Motivation researchers in doing research is to be able to understand how to make the appropriate budget and see how companies can implement to make good budget so as to responsible at the revenue and expense centers. The study examines the problems that occur in the company, researchers can gain a clearer picture of how to...
tracking img