(BQ) In the previous chapters we considered how information could be developed to help managers make decisions. In this chapter we will discuss the fundamentals of management control systems. After studying this chapter you should be able to: Explain the role of a management control system, identify the advantages and disadvantages of decentralization, describe and explain the basic framework for management control systems. | © 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Fundamentals of Cost Accounting, 4th edition Lanen/Anderson/Maher Fundamentals of Management Control Systems Chapter 12 In the previous chapters we considered how information could be developed to help managers make decisions. In this chapter we will discuss the fundamentals of management control systems. Learning Objectives LO 12-1 Explain the role of a management control system. LO 12-2 Identify the advantages and disadvantages of decentralization. LO 12-3 Describe and explain the basic framework for management control systems. LO 12-4 Explain the relation between organization structure and responsibility centers. LO 12-5 Understand how managers evaluate performance. LO 12-6 Analyze the effect of dual- versus single-rate allocation systems. LO 12-7 Understand the potential link between incentives and illegal or unethical behavior. LO 12-8 Understand how internal controls can help protect assets. After studying this chapter you should be able to: 1. Explain the role of a management control system. 2. Identify the advantages and disadvantages of decentralization. 3. Describe and explain the basic framework for management control systems. 4. Explain the relation between organization structure and responsibility centers. 5. Understand how managers evaluate performance. 6. Analyze the effect of dual- versus single-rate allocation systems. 7. Understand the potential link between incentives and illegal or unethical behavior. And finally, understand how internal controls can help protect assets. Alignment of Managerial and Organizational Interests LO 12-1 Explain the role of a management control system. A management control system is designed to help managers make decisions that will increase the | © 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Fundamentals of Cost Accounting, 4th edition Lanen/Anderson/Maher Fundamentals of Management Control Systems Chapter 12 In the previous chapters we considered how information could be developed to help managers make decisions. In this chapter we will discuss the fundamentals of management control systems. Learning Objectives LO 12-1 Explain the role of a management control system. LO 12-2 Identify the advantages and disadvantages of decentralization. LO 12-3 Describe and explain the basic framework for management control systems. LO 12-4 Explain the relation between organization structure and responsibility centers. LO 12-5 Understand how managers evaluate performance. LO 12-6 Analyze the effect of dual- versus
